October 18, 2021

5th Fiscal Period (Ended August 2021)
Financial Results Briefing Materials

AssetManagement
CompanySANKEI REAL ESTATE Inc.

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SANKEI REAL ESTATE Inc.

Table of Contents

Executive Summary… P3

1．Financial Results andManagement Highlights… P4

2．External Growth Results and Strategy… P16

2-1 External Growth Results…P17

2-2 External Growth Strategy…P21

3．Internal Growth Results and Strategy
3-1 Internal Growth Results…P27

3-2 Internal Growth Strategy

…P29

… P26

4．Financial Strategy… P32

5．ESG Initiatives… P36

Appendix… P39

Disclaimer
This document is intended for the purpose of providing information on
SANKEI REAL ESTATE Inc. (hereinafter, “SANKEI REAL ESTATE”), and is
not intended for the purpose of soliciting investment in orrecommending the trading of specific products. Please consult yoursecurities company for any purchase of SANKEI REAL ESTATE investment
units. When making any investment, investors do so at their sole
discretion and risk. The information provided in this document is ananalysis or a judgment made by Sankei Building Asset Management Co.,
Ltd. (hereinafter, “Sankei Building Asset Management”) based on
information currently available to Sankei Building Asset Management,
and Sankei Building Asset Management does not guarantee and is notliable whatsoever for the accuracy, reliability, integrity, etc. thereof. In
addition, the content may be changed or abolished without prior notice.
The content of this document contains earnings forecasts and otherforward-looking statements. These forward-looking statements are nota guarantee of future business performance or financial content of
SANKEI REAL ESTATE. All rights to any part of this document belong toSankei Building Asset Management, and no part of this document shallbe used, cited, reproduced, altered, disassembled, transmitted, etc. by
any means, electronic or mechanical, for any purpose without
permission. This document is not a disclosure document based on the
Financial Instruments and Exchange Act. Please contact below if you
have any inquiries concerning this document.
Sankei Building Asset Management Co., Ltd.
Finance & IR Department
Phone: +81-3-5542-1316

2

SANKEI REAL ESTATE Inc.

Executive Summary
Financial Results and Management Highlights

 In the 5th FP, revenue and profit increased (operating revenue: +1.3%; operating profit: +2.0%) fromthe previous fiscal period
 Resolved to acquire 4 new properties through capital increase through public offering (Aug. 2021)
Asset size: 71.5 billion yen → 96.6 billion yen (+ 25.1 billion yen, +35.1% compared with before) DPU*1 for the 5th FP was maintained at the beginning-of-period forecast*2 of 2,862 yen throughtemporary distribution in excess of earnings
 Participation in GRESB Real Estate Assessment (July 2021)
Obtained “3-Star” and “Green Star” certifications (October 2021)
Future Growth Strategies

 Begin Phase 2 aimed at the mid-term target (200-300 billion yen in asset size)

Aim for early inclusion in global indices

External growth and internal growth that enable sustained growth of DPU
・ Implement diversified investment conscious of the portfolio matrix
・ Seek room for internal growth and reduce risk of internal degeneration

Consider seeking to obtain ratings in earnest

Consider enhancing the sustainability promotion system*1 “DPU” refers to distribution per unit. The same applies below.
*2 Beginning-of-period forecast (hereinafter “forecast”) refers to the forecasts for the 5th FP at the time of the announcement of thefinancial results for the previous fiscal period (April 2021). The same applies below.

3

SANKEI REAL ESTATE Inc.

1. Financial Results and Management Highlights

4

SANKEI REAL ESTATE Inc.

Financial Results Highlights- Operating revenue and operating profit increased from the previous fiscal period Revenue and profit increased in the 5th FP, with +1.3% operating revenue and +2.0% operating profit from the previous fiscal
periodAlthough there was an accrual of non-operating expenses associated with the acquisition of 4 new properties, DPU for the 5th FP
was maintained at the forecast of 2,862 yen (+0.5% compared with the previous fiscal period) due to temporary distribution inexcess of earnings
Distribution in excess of earnings was reduced from the revised forecast of 62 yen per unit to 20 yen per unit due to income fromleasing, etc. exceeding the revised forecast from August■ Financial Summary for 5th Fiscal Period (Ended August 2021)
Comparison with
beginning-of-period forecast

Results

2,176 million yen
1,141 million yen
1,014 million yen
2,862 yen

Operating revenue
Operating profit
Net profit
DPU (distribution per unit)-0.1% -2 million yen+2.0% +21 million yen-0.7% -7 million yen
0.0%
0 yen

■ Change in DPU for the 5th Fiscal Period (Ended August 2021)
2,862 yen

62 yen2,800yen+0.5%

2,700yen
2,600yen
2,500yen
2,400yen

2,862 yen

2,862 yen

2,849 yen

+1.3% +28 million yen+2.0% +22 million yen-0.2% -2 million yen+0.5%+13 yen(Unit: yen per unit)

3,000yen
2,900yenComparison withprevious fiscal period

Distributions inexcess of
earnings

2,800 yen

20 yen2,842 yenComparison withrevised forecast
2,800 yen → 2,842 yen
Increase of 42 yen(+1.5%)～～
4th FP
Results

5th FP Forecasts(As of April 2021)

5th FP Revised Forecast(As of August 2021)

5th FP
Results

5

SANKEI REAL ESTATE Inc.

Financial Results Highlights
Summary of DPU for the 5th FP (Ended August 2021) (Comparison with Previous Fiscal Period)DPU for the 5th FP was 2,862 yen with distributions in excess of earnings added (up 0.5% over the previous fiscal period)
Due to increased rental revenue, etc. and decreased expenses related to leasing business, operating profit increased, but due toaccrual of non-operating expenses (mainly borrowing-related expenses) associated with the acquisition of 4 new properties, DPU
was 2,842 yen
Due to a distribution in excess of earnings of 20 yen as a refund of investment that falls under distribution reducing investment,
etc. under tax law, DPU was maintained at 2,862 yen as forecast(yen per unit)■ Summary of DPU for 5th FP (Ended August 2021)

Comparison withprevious fiscal period

Internal Growth Results+13 yen(+0.5%)-10
Change in
expenses related
to leasing
business

Change in rental
revenue, etc.

-5
Change in otheroperatingexpenses

Main breakdown
・Outsourcing expenses +38
・Utilities expenses -16
・Property taxes -23
・Repair expenses -9-70

Distributions inexcess of
earnings

Change in nonoperating
income (loss)
Main breakdown
・Borrowing related
expenses -60
・Interest expenses -13[Reference] Impact of the
COVID-19 pandemic
Breakdown of DPU～～

Office revenue
Store revenue
Rental conference
room revenue

4th FP Result

Total DPU

5th FP
results

Comparison withprevious fiscal period

ChangeChange0 yen-12 yen

0 yen-12 yen-8 yen-1 yen-20 yen-13 yenProfit distribution

5th FP Result
6

SANKEI REAL ESTATE Inc.

Financial Results Highlights (Comparison with Forecast)
5th Fiscal Period (Ended August 2021)

 Compared with forecasts, operating revenue was almost as forecast (-0.1%) and operating profit
increased (+2.0%)(Unit: million yen)
5th FP Forecasts (A)(as of April 2021)

Accounting period
Operating revenue

5th FP Results (B)(August 2021)

Difference(B)-(A)

Major Factors for the Difference

2,178

2,176

(2)

2,048

2,032

(15) - Rental revenue -15 (tra ns fer of ca ncel l a tion pena l ty from Toyo to other revenue (-15))

Pa rki ng revenue

29

31

1

Util i ties rei mburs ement

95

89

(5)

Rental a nd CAM revenue

Other revenue

5

22

1,059

1,034

(24)

Expenses related to leasing business [Total]

817

793

(23)

Outs ourci ng expens es

173

169

(3) - Shi na ga wa Ma na gement As s oci a tion Fee (-2), etc.

Util i ties expens es

121

116

(4)

Repa i r expens es

5339(14) - BREEZÉ (-14), etc.

Property taxes

221

223

1

Depreci a tion

228

228

0

Other expens es

19

16

(2)

Operating income (loss) from leasing

1,361

1,382

21

241

241

(0)

As s et ma na gement fee

192

195

3

Other expens es

49

45

(4)

1,119

1,141

21

0

1

1

Operating expenses

Total other operating expenses

Operating profit
Non-opera ting i ncome
Non-opera ting expens es
Ordinary profit
Net profit
Distribution per unit (Unit: yen)

97

127

1,022

1,014

1,021

1,014

2,862 yen

2,862 yen

17 - Accrua l of ca ncel l a tion pena l ty from Toyo (i ncl udi ng tax) (+17)

30 - Borrowi ng rel a ted expens es by a cqui ri ng four new properties (+31)(7)(7)
0 yen - Incl udi ng di vi dends i n exces s of ea rni ngs of 20 yen

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SANKEI REAL ESTATE Inc.

Financial Results Highlights (Comparison with Previous Fiscal Period)
5th Fiscal Period (Ended August 2021)

 Compared with the previous fiscal period, operating revenue increased (+1.3%) and operating profit increased (+2.0%)(Unit: million yen)Accounting period
Operating revenue

4th FP Results (A)(February 2021)

5th FP Results (B)(August 2021)

Major Factors for the Difference

2,176

28

2,015

2,032

- Full contribution of Akasaka (+13) - Full contribution of occupancy in the previous fiscal period (+16) (BREEZÉ (+13),
Akihabara (+3))
17 - Elimination of Omori’s vacancy (+6) - Full contribution of upward rent revision (+8) (Shinagawa (+4), Akihabara (+3), etc.)- Rent holiday for HATCHOBORI in previous fiscal period (+2) - Cancellation of Tokyo Sankei (-4)- Decrease in rent of Hibiya (-5) - Toyo (-19) (transfer of cancellation penalty (-15), cancellation (-4))

Parking revenue

30

31

0

Utilities reimbursement

93

89

(4)
14 - Ca ncel l a ti on pena l ty from Toyo (i ncl udi ng ta x) (+17)

Rental and CAM revenue

2,147

Difference(B)-(A)

8

22

1,029

1,034

5

790

793

3

Outsourcing expenses

183

169

Utilities expenses

110

116

5

Repair expenses

35

39

3

Property taxes

214

223

8 - Fi xed a s s et ta x a nd ci ty pl a nni ng ta x for porti on of Aka s a ka a cqui red i n previ ous fi s ca l peri od expens ed

Depreciation

227

228

1 - One-month i ncrea s e i n a cqui s i ti on of Aka s a ka i n previ ous fi s ca l peri od (+1.3)

Other expenses

17

16

(1)

Operating income (loss) from leasing

1,357

1,382

24

Total other operating expenses

239

241

1

Asset management fee

186

195

8

Other revenue
Operating expenses
Expenses related to leasing business[Total]- Lea s i ng i ncenti ve i n the previ ous fi cs a l peri od (renewa l ) (-7.5) (Shi na ga wa , Aki ha ba ra )(13) - Lea s i ng i ncenti ve i n the previ ous fi s ca l peri od (new) (-1.5) (Omori ) - BREEZÉ a dmi ni s tra ti ve expens es (3.8)

52

45

(7)

1,118

1,141

22

Non-operating income

0

1

1

Non-operating expenses

101

127

Ordinary profit

1,017

1,014

(2)

Net profit

1,016

1,014

(2)

2,849 yen

2,862 yen

Other expenses
Operating profit

Distribution per unit (Unit: yen)

26 - Borrowi ng-rel a ted expens es (+23) - Interes t expens es (+4)

13 yen - Incl udi ng di vi dends i n exces s of ea rni ngs of 20 yen

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SANKEI REAL ESTATE Inc.

Management Highlights (External Growth)
Acquired 4 new properties in September 2021 (25.1 billion yen) Continued steady external growth with sense of speed, with asset size increasing to approx. 100 billion yen

Sponsor support rate 100%
Shinagawa Seaside
TS Tower

Hitachi Kyusyu Building

S-GATE AKASAKA

Miyazakidai
Garden Office

Towards the
Mid-term Target
Phase 2 kicks off
1,600billion yen

billion yen
1,400billion10.9
yenShinagawa-ku, Tokyo

10.0 billion yen

1.4 billion yen

2.8 billion yen

Sawara-ku, Fukuoka-shi

Minato-ku, Tokyo

Miyamae-ku, Kawasaki-shi

200 billion yen to
300 billion yen

1,200billion yen(billion yen)

96.6 billion yen

1,000billion
yen
100
800billion80
yen

71.5 billion yen

600billion60
yen

43.3 billion yen
400billion40
yen200billion yen
0～～
Newly listed in March 2019

At end of 4th FP in February 2021

公募増資後
After
2021年9月
acquisition

Mid-term target

September 2021
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SANKEI REAL ESTATE Inc.

Management Highlights (External Growth)
Acquired 4 new properties in September 2021 (25.1 billion yen)

 Realized quick external growth speed (high rate of asset size growth) through powerful sponsor support■ Annual Average Growth Rate of Asset Size Since Listing of Office
J-REITs *(asset size of less than 300 billion yen)
50.0%

Continuation of external growth Expansion of asset size entails an increase ininvestment units and boosts liquidity,
thereby creating opportunities for enhancing
unitholder value.

Increased to 49.2%

40.0%

39.5% (at the end of the previous FP)

30.0%

Realize highgrowth rate SANKEI REAL ESTATE, which has entered thesecond phase, aims to expand asset size at
an early stage.

20.0%
10.0%

0.0%
SANKEI REALESTATE■ Asset Size and Distribution Yield of Office J-REITs■Asset Size and P/NAV Distribution Chart of Office J-REITs *(asset size of less than 300 billion yen)(x)

Distribution yield decreases
as asset size increases(hundredmillion yen)

1.3

Asset size

15,0001.2

4.9%

P/NAV increases
as asset size increases

4.7%

5.4%
4.8%

SANKEI REAL ESTATE
Before acquisition

1.0

4.2%
After acquisition
5,000

0.9

4.1%
3.7%
3.2%

0.8

5.0%

4.6%

10,0001.1

Distribution yield (x)
5.5%

4.5%
4.0%
3.8%
3.7%3.7%3.7%
3.4%

4.0%

3.2%

0
0

1,000

2,000

3,000
(hundred million yen)

SANKEI REALESTATE* “J-REIT” refers to a listed real estate investment corporation. For the J-REITs included in “Office J-REITs” and other details, please refer to page 57 of this material.

3.5%
3.0%

1

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SANKEI REAL ESTATE Inc.

Management Highlights (Reference)

The rapid speed of external growth and steady internal growth led to significant growth of DPU (distribution per unit)■DPU of fiscal period ended Feb. 2021 (4th FP) shows figure during normal operation* DPU in 4th FP: Change from forecast at time of new listing to actual value(yen)+614 yen (+27.5%)

3,000

2,849

2,862

Unrealized gain
2,750
2,607

2,500

2,374
2,235

2,250

2,000

～
～
1,750
4th
FP Forecast
第4期予想
Announced on
2019年3月12日公表
March 12, 2019

4th
FP Forecast (Revision)
第4期予想（修正）Announced on
2019年8月6日公表
August 6, 2019

4th第4期予想（修正）FP Forecast (Revision)
Announced on
2020年9月7日公表
September 7, 2020

4th
FP Results
第4期実績
Announced on
2021年4月15日公表
April 15, 2021

Newly listed

Capital increase
through public
offering

Acquisition of
S-GATEAKASAKA

4th FP
Financial
Results

5th
FP Results
第5期実績

5th FP
Financial
Results11

SANKEI REAL ESTATE Inc.

MEMO

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SANKEI REAL ESTATE Inc.

Earnings Forecasts for the 6th Fiscal Period (Ending February 2022) and ThereafterDPU for the 6th FP is expected to increase over the 5th FP as the newly acquired 4 properties contribute to revenue
DPU for the 7th FP is expected to be the amount during normal operation as fixed asset tax and city planning tax are expensed forthe newly acquired 4 properties
Hotels (2 properties) that are sub-assets have no risk of reduced revenue due to contracts and sponsorship commitments(yen per unit)
Effects ofpropertyacquisition

-20
-141
Distributions
in excess ofearnings
Rentalrevenue-95
Expensesrelated toleasingbusiness

-40

-162
Other
operatingexpenses

Nonoperating
income (loss)

Propertyacquisition
fixed asset tax
and cityplanning tax
expensed

Rentalrevenue

Expensesrelated toleasingbusiness-98
Other
operatingexpenses-26
Nonoperating
income (loss)～～
0

4th FP
DPU
Result5th FP
DPU
Result

6th FPDPU
Forecast

7th FPDPU
Forecast
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SANKEI REAL ESTATE Inc.

Earnings Forecasts for the 6th Fiscal Period (Ending February 2022) and Thereafter

DPU forecast for the 6th FP 2,958 yen: +3.4% (+96 yen) over the 5th FP without fixed asset tax and city planning tax expensed
DPU forecast for the 7th FP 2,703 yen: -8.6% (-255 yen) over the 6th FP with fixed asset tax and city planning tax expensed(Unit: million yen)Accounting period
Operating revenue
Rental and CAM revenue

5th FP Results (A)(August 2021)

6th FP Forecasts (B)(February 2022)

Difference(B)-(A)

7th FP Forecasts (C)(August 2022)

Difference(C)-(B)

Major Factors for the Difference

2,176

2,775

599

2,808

33

2,032

2,613

580

2,644

31

Parking revenue

31

35

4

35

0

Utilities reimbursement

89

120

30

121

1

Other revenue

22

7

(15)

7

(0)

Operating expenses

1,034

1,249

214

1,389

139

Expenses related to leasing
business [Total]

Operating revenue (+599)- Rent from new acquisitions (+615)- Rent from others than new acquisitions (-35) (Toyo (-30), Hibiya (-6), Hatchobori (-6), BREEZÉ (+5),etc.)- Utilities reimbursement (+30) (for new acquisitions (+27), etc.)
・Parking revenue (+4)

・Other revenue (-15)（Cancellation penalty from Toyo in the previous fi scal

period (-17), etc.)

793

980

186

1,074

93

Outs ourci ng expens es

169

223

54

216

(7)

Utilities expenses

116

143

26

151

8

- Utilities expenses (+26) (for new acquisitions (+27), etc.)- Repair expenses BREEZÉ (+20)

Repair expenses

39

58

19

59

0

Property taxes

223

222

(0)

309

87

Depreciation

228

309

80

313

4

Other expenses

16

23

6

23

0

Operating income (loss) from leasing

1,382

1,795

412

1,734

(60)

Total other operating expenses

241

269

28

314

45

Asset management fee

195

210

14

258

47

Other expenses

45

58

13

56

(1)

1,141

1,526

384

1,419

(106)

1

0

(1)

0

0

Operating profit
Non-operating income
Non-operating expenses
Ordinary profit
Net profit
Distribution per unit (Unit: yen)
NOI

6th FP Forecasts (Comparison with 5th FP)

Expenses related to leasing business (+186)
・Outsourcing expenses (+54)（for new acquisitions (+37) and leasing incentive (+15), etc.)- Depreciation (+80) for new acquisitions, etc.

7th FP Forecasts (Comparison with 6th FP)
Operating revenue (+33)- Rental revenue (+31)1) Vacancy filled (+51) (Toyo (+41), Omori (+5), Miyazakidai (+3), Tokyo Sankei (+1.6))
2) Elimination of rent holiday in the previous fiscal period (+2), pay by day from new acquisitions (+3)3) Cancellations, etc. (-25) (BREEZÉ (-17), Hibiya (-8))

127

143

16

155

12

1,014

1,382

367

1,263

(118)

- Outsourcing expenses (-7) Leasing incentive- Utilities expenses (+8) (BREEZÉ (+2), Shinagawa (+4), Toyo (+1), Hatchobori (+1))

1,014

1,381

367

1,262

(118)

2,862 yen

2,958 yen

96 yen2,705 yen(255 yen)

1,610

2,104

493

2,048

(56)

Expenses related to leasing business (+93)- Property taxes (+87) (Fixed asset tax and city planning tax expenses for new acquisitions expensed (+75),
increase in fixed asset tax and city planning tax for FY2022 (+12))- Depreciation (+4) Increase in capital expenditure

14

SANKEI REAL ESTATE Inc.

Change in NAV per Unit (after Deduction of Distribution)
 Both external growth and internal growth prove successful; average annual growth rate remains 6.4%
+ 13.2% compared with 1st FP
Average annual growth rate of 6.4%
(Unit: yen)

123,491

121,641

122,507

19,227

20,114

120,000

114,157
21,078108,184

110,000

11,744

11,670

Unrealized
gain

100,000

90,000Capitalincreasethroughpublicoffering

102,413

102,413

102,413102,393

End of February 2020
(2nd FP)End of August 2020
(3rd FP)End of February 2021
(4th FP)End of August 2021
(5th FP)

96,515～～

Net assets

80,000End of August 2019
(1st FP)

15SANKEI REAL ESTATE Inc.

2.

External Growth Results and Strategy

16

SANKEI REAL ESTATE Inc.

2-1 External Growth Results
Acquired 4 New Properties in September 2021 (25.1 billion yen)

 Newly acquired 4 office buildings and the asset size following the acquisition expanded to approx. 100 billion yen
 Expanded asset size bearing comparison with economic indicators before and after the property acquisition■Change in the portfolio after the 4 properties
were acquired■Acquired assets
Shinagawa Seaside
TS Tower
Property name(25% quasi co-ownershipinterest in sectional
ownership of the building,etc.)

Hitachi Kyusyu
Building

S-GATE AKASAKA(20% quasi co-ownershipinterest)

Beforea cquis ition

Acquireda s s ets

Afteracquisition

71.5
billion yen

25.1
billion yen

96.6
billion yen

Number ofproperties

12 properties

4 properties

Acquisition priceper property

5.9
billion yen

6.2
billion yen

6.9
billion yen

4.3%

4.4%

4.3%

98.2%

100.0%

98.9%

100.0%

100.0%

100.0%

81.9%

100.0%

86.6%

Miyazakidai
Garden Office

Asset size
(Acquisition price)

Photo of theproperties

Sponsor support

Sponsor support

Sponsor support

Sponsor support

Office buildings

Office buildings

Office buildings

Office buildings

Shinagawa-ku,
Tokyo

Sawara-ku,
Fukuoka-shi

Minato-ku,
TokyoMiyamae-ku,
Kawasaki-shi

Acquisition price

10,900 million yen

10,000 million yen

1,400 million yen

2,800 million yen(acquisition price basis)

Appraisal value

11,000 million yen

10,200 million yen

1,422 million yen

2,830 million yen

Average occupancy
rateAppraisal NOI yield

3.9%

4.8%

3.3%

5.0%

Location

Sponsor support rate(acquisition price basis)

Construction
completion

July 2003

Feb. 1996

July 2015

Feb. 1993
Office buildings rate

Occupancy rate
(As of September 2, 2021)

100.0%

100.0%

100.0%(including additionallyacquired 2 properties)

Average appraisal
NOI yield(acquisition price basis)

14 properties

100.0%(acquisition price basis)

17

SANKEI REAL ESTATE Inc.

2-1 External Growth Results
Acquired 4 New Properties in September 2021 (25.1 billion yen)
(25% quasi co-ownership interest in sectional ownership of the building, etc.)(Additionally acquired)Made additional acquisition of high-spec building with typical floorplate of approximately 446 tsubos located a 1-minute walk from station
1. Located in the “Shinagawa Seaside Forest” where head offices andback offices of companies such as IT companies and manufacturers
are concentrated.
2. A high-spec high-rise building with a typical floorplate of 446
tsubos, ceiling height of 2,700 mm and a total floor area of over
50,000 m2, also corresponding to the security level required bymajor general machinery companies
3. 1-minute walk from Shinagawa Seaside Station on the Rinkai Line,
offering direct access to Shibuya Station and Shinjuku Station. Also
has good access to Haneda Airport and Shinagawa Station.
Acquisition
priceAppraisal
value
Appraisal NOI
yield■ Shinagawa Seaside Forest Block Map

10,900 million
yen
11,000 million
yen
3.9%

Location
Total floor
area
Construction
completion

 Change in NOI (has maintained in normal operation since the 3rd FP)
109

110

109

105
100

* Indexation with NOI for the 3rd FP as thebase value of 100

95

3rd FP

4th FP

5th FP Cases of offices that relocated to Higashi-Shinagawa
 Among 10 cases of office relocation to Higashi-Shinagawa, 7 were to
Shinagawa Seaside Forest (Shinagawa SSF)

Shinagawa-ku,
TokyoTime of relocation

Function

Relocated to

Head office

Shinagawa SSF

2015

Name of company (business type)
NTT Data CCS (information &communication)
BIGLOBE (information & communication)

Head office

Shinagawa SSF

2015

Nitto Denko (manufacturing)Tokyo branch

2016

Mercedes-Benz Japan (manufacturing)

Head office

Shinagawa SSF

2016

Accordia Golf (service)

Head office

Shinagawa SSF

2017

JACCS and its group company (financial)

Head office/subsidiary

2018

Anshin Guarantor Service (service)

Head office

Shinagawa SSF

2020

Yusen Logistics (logistics)

Head office

Shinagawa SSF

2020

NYK Trading Corporation (trading house)

Head office2021

Toyo Tires (manufacturing)Tokyo branch

2014

52,977 m²
July 2003■ Typical Floor Plan (Approx. 446 tsubos)

Shinagawa SSF

 Asking rent in the Kita-Shinagawa/Higashi-Shinagawa area
Kita-Shinagawa/Higashi-Shinagawa area
Gotanda/Osaki area

120
110
100
90

Area with little change in rents even when comparedwith that before and after the COVID-19 crisis

80

Source: Prepared by the Asset Management Company based on “Market Data over
Time by Area” Sanko Estate Co., Ltd.

18

21/7

21/5

21/3

21/1

20/11

20/9

20/7

20/5

20/3

20/1

19/11

19/9

19/7

Shinagawa Seaside Station
Exit C

19/5*Indexation of average asking rent in January 2020 as the base value of 100

70

19/3



Shinagawa Seaside TS Tower

19/1

A-8

SANKEI REAL ESTATE Inc.

2-1 External Growth Results
Acquired 4 New Properties in September 2021 (25.1 billion yen)
A-12

Hitachi Kyusyu Building

A large-scale office building with high visibility and information confidentiality located in Fukuoka’s subcenter “Seaside Momochi”■ Seaside Momochi area

 Asking rent in the Fukuoka area
Rent levels stable at low level compared to competing areas
Area with little change in rents even when compared with that
before and after the COVID-19 crisis

Residential area
(residences,schools, etc.)

HiltonFukuoka
SEAHAWKThe Park House
Fukuoka Towers

Fukuoka PayPay
Dome

Shopping Center
MARK IS Fukuoka
Momochi

Hitachi Kyusyu
Building

19,00018,00017,00013,000The entire building with a high level of information
confidentiality is leased to Hitachi, one of the leading
companies in the information and communication industry

21/7

21/4

21/1

20/10

20/7

20/4

20/1

Source: Prepared by the Asset Management Company based on “Market Data over
Time by Area” Sanko Estate Co., Ltd.

Television
Nishinippon

A highly visible large-scale office building located in the
Momochihama area, the hub of the information andcommunication industry

19/7

19/1

The Park House
Fukuoka Towers

19/4

12,000

19/10

Fujitsu Kyushu
R&D Center3.

Fukuoka-shi

14,000Fukuoka SoftResearch Park
(SRP)

2.

Tenjin area

Hakata Station area

15,000

NEC Kyushu
SystemCenter1.

20,000

Momochihama area

16,000KyushuMedicalCenterBusiness area

Fukuoka
Tower(Unit: yen pertsubo)■ Typical floor plan (Approx. 322 tsubos)
Acquisition
priceAppraisal value

10,000 million
yen
10,200 million
yenAppraisal NOI
yield

4.8%

Location

Sawara-ku,
Fukuoka-shi

Total floor area
The Momochihama area on Hakata Bay where the property is
located has been developed as Seaside Momochi, and isConstruction
developing as a second city center with a comprehensive urban
completion
environment including both residential and retail aspects

26,518 m²
Feb. 1996

19

SANKEI REAL ESTATE Inc.

2-1 External Growth Results
Acquired 4 New Properties in September 2021 (25.1 billion yen)
A-10

S-GATE AKASAKA(20% quasi co-ownership interest)(Additionally acquired)

A-11

 First property in the S-GATE series under the sponsor branding strategy
1.

The property is a 1-minute walk from Akasaka Station on the Tokyo
Metro Chiyoda Line, the nearest station, and also has access toTameike-sanno Station, Akasaka-mitsuke Station, and Nagatacho
Station, with access to four stations and six lines.

2.

The Akasaka area where the property is located is a popularlocation as an office area and is undergoing large-scale urban
redevelopment.

3.

The S-GATE high-grade mid-sized office building offers excellent
tenant services in terms of comfort, security, safety, environment,
BCP, and human aspects.

4.

Acquired 2020 3 star DBJ Green Building certification

Acquisition priceAppraisal value
Appraisal NOI
yield

■ Map

Miyazakidai Garden Office Office building with a stable tenant composition matching
local needs with a typical floorplate of 350 tsubos
1.

2.

Tenant composition
Matches local needs

1,400 million
yen
1,422 million
yen

Location

Minato-ku,
TokyoTotal floor
area

3,918 m²

3.3%

Construction
completion

July 2015■ Adjacent to redevelopment area
 The area around Tokyo Metro Akasaka Station to which
the property is adjacent is undergoing redevelopmentthat is aimed to be completed in 2028 mainly by TBS
Holdings

•
•
•
•
•
•

Social welfare-related office
Food-related office
IT & telecommunicationsrelated officePrivate tutoring school
Daycare center
Architectural officeAcquisition price2,800 million yen

Location

Miyamae-ku,
Kawasaki-shi

Appraisal value

2,830 million yen

Total floor area

4,404 m²

Appraisal NOI yield

5.0%

Construction
completion

Feb. 1993■ Map

 The redeveloped buildings will house hotels, offices andretail facilities, in addition to plans for the constructionof theaters and halls, which are expected to make thearea busier■ A high-spec building equipped with BCP
measures and earthquake protection
 Despite being mid-sized, has the same level of
specifications as an A-class building, such as an
emergency generator, emergency storage facilities, andan earthquake resistance level equivalent to 1.25 times
that of the Building Standards Act

3.

An office building with highscarcity around the station
located on a highly visible
corner, a 3-minute walk from
Miyazakidai Station on the
Tokyu Denentoshi LineIt has a stable tenantcomposition matching local
needs such as major
education companies anddaycare/welfare providers
A building with the floor
space and specs that meetthe needs of tenants, such asa typical floorplate of approx.
350 tsubos, ceiling height of
2,600mm and support forindividual air conditioning

3-minute walk from Miyazakidai Station■ Main facilities and specifications
Typicalfloorplate

Approx. 350 tsubos

Ceiling height

2,600mm

Air conditioning

Individual air
conditioning

Floor cabling

Raised floor(40mm)

Floor load

300 kg/m²

20

SANKEI REAL ESTATE Inc.

2-2 External Growth Strategy - Implement Diversified Investment Conscious of the Portfolio Matrix Core investment centered on
developed properties

Strong sponsor
support■Cap. Rate (Appraisal NOI Yield) x Area × Acquisition Price
Low
2.5%

3.0%

Cap. Rate

3.5%

4.0%

4.5%

0

1
(Chiyoda, Chuo, and Minato wards)(Other than
2 central 3 wards ofTokyo)

Actual NOI yield *Greater Tokyo3(excluding
Tokyo 23
wards)

Osaka-shi
4
Nagoya-shi

Other ordinancedesignated cities
5
Core cities, major regional
citiesTokyo Sankei Building

S-GATE AKASAKA

Typical floorplate
536 tsubos
21 years old
1-minute walk

Typical floorplate
158 tsubos
6 years old
1-minute walk

Office buildings
Sub assets* Red indicates acquired assets
The size of bubble represents theacquisition price.

Hotel Intergate Tokyo
Kyobashi

S-GATENIHONBASHI-HONCHO
Typical floorplate
186 tsubos
2 years old
4-minute walk

S-GATE AKIHABARA

Typical floorplate
219 tsubos
30 years old
9-minute walk

5.0%
Hatchobori Sankei
Building
Typical floorplate
201 tsubos
56 years old
3-minute walk

Omori Park Building

Shinagawa Seaside
TS Tower
Typical floorplate
446 tsubos
18 years old
1-minute walk

■ Investment Ratio byGeographic Area
Hiroshima-shi
4.1%
Fukuoka-shi
10.3%

Kawasaki-shi
2.9%

Toyo Park Building

HibiyaSankei
Building
Typical floorplate
105 tsubos
29 years old
1-minute walk

4.4%

Osaka-shi
13.6%

3 years old
1-minute walk

Typical floorplate 74 tsubos
4 years old, 5-minute walk

5.5%

Area

Tokyo 23 wards

Central 3 wards of Tokyo

Makes portfolio’s profitability
and stability compatible

Diversified investment by making
maximum use of strong sourcing ability

Typical floorplate342 tsubos
28 years old
3-minute walkMiyazakidai
Garden Office
Typical floorplate
350 tsubos
28 years old
3-minute walkGreater
Tokyo
72.0%

Tokyo 23 wards
69.1%

Hitachi Kyusyu Building

BREEZÉ TOWER
Typical floorplate
406 tsubos
13 years old
3-minute walk

Typical floorplate ■Investment Ratio by Asset
322 tsubos
25 years old
17-minute walk
Sub assets
13.4%

Hotel Intergate
Hiroshima
2 years old
3-minute walk

Office buildings
86.6%

High6.0%* “Actual NOI yield” refers to the actual NOI yield calculated using the following equation for assets after acquisition. With regard to the timingof after acquisition, actual NOI yield is shown as of August 31, 2021 for assets before acquisition and as of September 2, 2021 for assets after
acquisition.
Actual NOI yield = Actual NOI (annualized) ÷ acquisition price21

SANKEI REAL ESTATE Inc.

2-2 External Growth Strategy - Implement Diversified Investment Conscious of the Portfolio Matrix  Top preference criteria are 1) Transportation convenience, 2) Cost, incl rent, 3) Location, and 4) Security.
 Aim to build a well-balanced office building portfolio to meet demand for tenants■Preference criteria for office buildings amid theSatisfaction with SANKEI REAL ESTATE’s properties compared with
COVID-19 pandemic
the results of the questionnaire survey (for office buildings)

Results of questionnaire survey
Transportation convenience (commuting)
Cost (including rent, utilities and administrative expenses)
Location (name recognition, concentration of office buildings)
Building’s security
Building’s BCP compatibility
Building’s seismic resistanceTransportation convenience (sales activities)
Comfort (air conditioning, illuminance, etc.)
Advantage at the time of hiring
Building’s
communicationenvironment
environment
Building’s
telecommunication
Building’s maintenance system (cleaning, etc.)
Building’s feelings of grade
TheTheshapeof anportionshapeof individually-owned
exclusively owned areas
Availability of flexible offices and rental conference rooms
Elevators
Options in the lease agreement
Environmental consideration
Amenities (cafes, eateries, and other retail outlets)
Presence of the competition
Incentives by the central/local governments (subsidies, etc.)

0%

84%
79%
69%
65%
62%
61%
60%
57%
47%
45%
45%
43%
31%
28%
25%
24%
19%
14%
11%
4%
20%

40%

60%

Source: “Tenants’ Awareness Survey on the Use of Offices (Oct. ~ Nov. 2020) released by CBRE

80% 100%

Transportation
convenience

Cost

Location

Security

BCP
compatibility

Shinagawa Seaside TS Tower

◎

A

○

◎

◎

BREEZÉ TOWER

◎

B

◎

◎

◎

Hitachi Kyusyu Building

〇

A

○

◎

◎

S-GATE NIHONBASHI-HONCHO

◎

B

◎

◎

◎

Hibiya Sankei Building

◎

C

◎

〇

-

S-GATE AKASAKA

◎

B

◎

◎

◎

Omori Park Building

○

A

○

〇

-

Hatchobori Sankei Building

◎

A

◎

〇

〇

Toyo Park Building

〇

A

○

〇

-

Miyazakidai Garden Office

〇

A

○

〇

〇

Tokyo Sankei Building

◎

C

◎

◎

◎

S-GATE AKIHABARA

◎

B

◎

◎

〇

Property name

Transportation
convenience◎ 5-minute walk or less from a JR or subway station

Cost

A
B
C

○

Location◎

Security

◎

BCP

◎

○

○
○
-

More than 5-minute but less than 10-minute walk from a JR or subway station, or 5-minute
walk or less from other private railway station or a bus stop
Rent of 20,000 yen or less
Between 20,000 yen and 30,000 yen, inclusive
More than 30,000 yen
In the Miki Shoji Business District
In Tokyo 23 wards, excluding the above areas, Yokohama and Kawasaki cities, Kanagawa
Prefecture, Osaka-shi and Fukuoka-shi
IC card reader for exclusively owned areas, entrance (equipped with flapper gate facilities orin-person security)
IC card reader for exclusively owned areas, entrance (with employees only entrance/exit)
Availability of power generation for emergency
Availability of space for power generation for emergency
Other than the above

Source: Prepared by the Asset Manager*Property names are in descending order of acquisition price22

SANKEI REAL ESTATE Inc.

2-2 External Growth Strategy - Implement Diversified Investment Conscious of the Portfolio Matrix Sponsor support (1)■ Office building (main asset) development properties *Excerpt of major properties
Office buildings
Honmachi Sankei Building
Overview
Location
Construction
completion
Total floor area

JA Building/Keidanren Kaikan

Hareza Tower

Overview

Overview

Honmachi, Chuo-ku, Osakashi, Osaka

Location
Construction
completion
Total floor
area
Number offloorsAug. 2021
29,677 m²

Number of floors 21 floors above ground

Location

Otemachi, Chiyoda-ku, Tokyo

May 2020

Construction
completion

April 2009

Approx. 68,600 m²

Total floorarea

Approx. 88,400 m²/ approx. 71,200 m²

33 floors above ground and 2
floors below groundNumber offloors37 floors above ground, 3 floors below
ground and 2-story penthouse
23 floors above ground, 4 floors below
ground and 2-story penthouse

Higashi-Ikebukuro, Toshima-ku,
Tokyo

Concept of the S-GATE Series
Bringing “people” to the middle of the office.
The S-GATE Series are high-grade mid-sized office buildings offering high specs
at mid-size based on Sankei Building’s accomplishments developing large-scale
office buildings.

Acquired

S-GATE AKASAKAS-GATE AKASAKASANNOS-GATE OTEMACHI-KITA

Acquired

Acquired

S-GATE AKIHABARA

S-GATE NIHONBASHIHONCHO

Feb. 2022
Slatedcompletion

X-PRESS YURAKUCHO BLDG.
managed by S-GATE* With the exception of those indicated as “Acquired”, the properties shown are not properties owned or planned to be acquired by SANKEI REAL ESTATE as of the date of
preparation of this material, and there is no assurance that SANKEI REAL ESTATE will decide to acquire or be able to acquire these in future.
The incomplete buildings in the figure above are renderings prepared based on the assumption of the buildings being completed and may differ from the actual buildings.

S-GATE HATCHOBORIS-GATE FIT Hatchobori

23

SANKEI REAL ESTATE Inc.

2-2 External Growth Strategy - Implement Diversified Investment Conscious of the Portfolio Matrix Sponsor support (2)■ Sub asset development properties
Logistics facilities
Developing small-medium logistics facilities with high functionality, multiple
tenants and little competition
Sankei Building, the sponsor, perceives the needs of customers in thedevelopment of logistics facilities, and not only offers plans that
improve package storage efficiency and are flexibly adaptable to split
use, but aims to build facilities that “enable employees to work in
comfort” by utilizing its know-how as a developer to pay attention todetails including entrances and common areas.
Area

Property nameCompletion

Osaka Area

Minoh Morimachi Logistics Facility(tentative name)

June 2021

Greater Tokyo

SANKEILOGI Kashiwanoha

Mar. 2022 (planned)

Greater Tokyo

SANKEILOGI Atsugi

Sept. 2022 (planned)

Osaka Area

Settsu Logistics Project(tentative name)Sept. 2022 (planned)

Rendering of SANKEILOGI Kashiwanoha

Residential• LEFOND PROGRES and others planned to
be developed
Rendering of SANKEILOGI Atsugi

HotelsRendering of Settsu Logistics Project (tentative name)• Lease agreement with the sponsor group in
hotel properties owned by SANKEI REALESTATE■ Ability to source properties from third parties

 SANKEI REAL ESTATE not only has an extensive range of sponsor-developed properties but also is continuing to acquire properties from third parties by fully
utilizing the sponsor’s powerful ability to source properties
Major acquisitions through sponsor sourcing
Acquired during
the 2nd/6th FP

Acquired during
the 6th FP

Acquired during
the 2nd FP

Acquired at the time oflisting

Acquired at the time oflisting

Acquired at the time oflisting

Held by sponsor

Shinagawa Seaside
TS Tower

Hitachi Kyusyu
Building

Omori Park Building

Toyo Park Building

Hatchobori Sankei
Building

Hibiya Sankei
Building

Omotesando Sankei
Building* The above sub asset development properties and Omotesando Sankei Building are not properties owned or planned to be acquired by SANKEI REAL ESTATE as of thedate of preparation of this material, and there is no assurance that SANKEI REAL ESTATE will decide to acquire or be able to acquire these in future.

24

SANKEI REAL ESTATE Inc.

MEMO

25

SANKEI REAL ESTATE Inc.

3.

Internal Growth Results and Strategy

26

SANKEI REAL ESTATE Inc.

3-1 Internal Growth Results - Rent Revision Performance of Office Buildings (Based on Financial Results)
 Maintain high occupancy rates despite the COVID-19 pandemic and maintain high profitability after acquisition of 4 new properties■Change in Occupancy Rate
100.0%

100.0%

100.0%

99.9%

100.0%
95.0%
90.0%
0

98.2%

98.9%

End of August 2021

After acquisition

97.2%

～
～
End of August 2019(End
End ofof February
February 2020)
2020

End of August 2020

End of February 2021

End of September 2021

After the COVID-19 crisis (March 2020)

Cases of Other REITs

Investment Corporation A: 97.5%
Investment Corporation C: 97.2%

Investment Corporation B: 97.9%
As at the end of September 2021 from each investment corporation’s website■Change in Portfolio’s Actual NOI Yield and Office Buildings Average Rent

(yen)

Actual NOI yield (left axis)
Bar graph Office Buildings Average Rent (right axis)

4.4%

4.3%

4.5%
4.0%

4.0%

19,309yen

4.0%

4.5%

4.4%

21,000
4.3%
20,00019,965yen

19,00018,486yen
3.5%

17,992yen

17,534yen

17,523yen

17,594yen
17,594円

18,0003.0%

17,0002.5%

16,0002.0%

15,000～～

1.5%0

FP endedAugust 2019

FP endedFebruary 2020

Cases of Other REITs

FP endedAugust 2020

FP ended
FP endedFebruary 2021
August 2021
After the COVID-19 crisis (March 2020)

Investment Corporation A: 22,436 yen
Investment Corporation C: 19,286 yen

After acquisition

Investment Corporation B: 20,341 yen

End of
September 2021～
～ 14,0000

27

SANKEI REAL ESTATE Inc.

3-1 Internal Growth Results -Rent Revision Performance of Office Buildings (Based on Contracts Signed)Pursue room for internal growth despite the COVID-19 pandemic and reduce the risk of internal degeneration■ Rent Revision Performance of Office Buildings (Based on Rental Area)
Number oftargeted
tenants

Targeted leased area
(ownership interest of
SANKEI REAL ESTATE)

Rate of increase
compared withprior to rent
revision(average)

Percentage(based onleased area)

Increase

4 cases

419 tsubos

35.1%

No change

6 cases

685 tsubos

57.3%

Decrease

3 cases

91 tsubos

7.6%

Total

13 cases

1,195 tsubos

100.0%

7.0%■Internal Growth Results Case (excerpt)
Pursue room for internal growth despite the COVID-19 pandemic

A-2+6.2% compared with before■ Number of Tenants by Use

Increase exceeding the market rent

No change

Increase

Decrease
Office33％ 1 case

4 cases

6 cases

3 cases

OfficeOffice

Shop

100％

100％

Increase

67％ 2 cases

Ordinary

No change

33％ 2 cases
Ordinary

A-3

S-GATE NIHONBASHIHONCHO

Compared with market rent
+5.6%

■ Number of Tenants by Contract Form
25％ 1 case

BREEZÉ TOWER

Reduction of the risk of internal degeneration
Decrease
A-9

Omori Park Building普通

4 cases

6 cases

Fixed-term
75％ 3 cases

Fixed-term

3 cases
Fixed-term
67％ 4 cases

100％

Albeit partial cancellation,
the floor remains+22.2% compared with before
28

SANKEI REAL ESTATE Inc.

3-2 Internal Growth Strategy- Continue to Aim for Internal Growth Even as Rent Gap Narrows -■Scheduled renewal with rent revision/renewal andprogress (targeting office buildings)■Rent gap for office buildings
10 office properties

EndingFebruary
2022

2,236
（8.8％）

Progress
rate *
16.3％

-8.5%

(6th FP)552（2.2％）

2022

-4.4%

As of March 2021 As of September 2021 As of September 2021

EndingAugust-5.5%

12 office properties(After acquisition)(on total rent basis; weighted average)(7th FP)

0 tsubo
0tubo

500
tsubos500tubotsubos1,000 tsubos 1,500
1,000tubo
1,500tubo

2,500 tsubos
2,000tubo
2,000 tsubos 2,500tubo
29

Contract Revision/Renewal Area
Contract Revision/Renewal Planned Area (Ratio to Total Leased Area)
Based on contracts signed (targeting lease agreements concluded between March 1, 2021, and August 31, 2021)*For the 6th FP (ending Feb. 2022), the percentage of total leased area after acquisition

 Focused Properties (continued from the previous term)
A-2

BREEZÉ TOWER
All tenants under
fixed-term lease

Rent gap

In earnest
negotiations aimed
at re-contract withrent increase withmajor tenants

A-7

Toyo Park Building
Cancellation due toconsolidation of bases

Vacancy rate rising in the
area

Contracts for certain
portions (fixed-termlease) (Oct. 2021)
Continue focus on
leasing activities

Assumed occupancy rate of portfolio
6th Fiscal Period(Ending February 2022)
・End of period 97.8%
・Period average 97.6%
7th Fiscal Period(Ending August 2022)
・End of period 99.7%
・Period average 99.2%

29

SANKEI REAL ESTATE Inc.

3-2 Internal Growth Strategy- Continuation of Strategic Leasing -Office leasing market

Current situation

Portfolio of SANKEI REAL ESTATE Decline in market rent, and rise in vacancy rate of small- and mediumsized buildings
 Increase in consolidations and relocations not involving floor space
expansion Corporate earnings strong or recovering except for some business types
 Efficiency/productivity of telework called into question●Office buildings in prime locations*1●High-performance office buildings*2●Office buildings near work and home*3

Outlook Rise in vacancy rate gradually easing due to decrease in new supply Future uncertainties clearing Diversification of demand for office locations (central Tokyo, near workand home, etc.)
 Office Centric: Trend toward placing the base point in offices
 Increase in preference for locations with good access and highperformance buildings

Well-balanced
possession+
Average rent less expensive than market
rent*4
Occupying tenants not easily affected by
the COVID-19 pandemic
Impact of the COVID-19 pandemic considered limited

Strategic leasing
 Pursuit of room for internal growth: Negotiate rent increase with tenants with a rent gap (especially tenants
under fixed-term lease) Reduction of the risk of internal degeneration: Distribute contract periods, advance cancellation notice, andswitch the form of contract (from ordinary lease → fixed-term lease) in view of property characteristics and tenantneeds Direct leasing by the Asset Management Company
 Leasing utilizing the customer base of the group companies, affiliated companies and network-related companiesof Fuji Media Holdings*1 Tokyo Sankei Building, BREEZÉ TOWER, Hibiya Sankei Building, S-GATE AKASAKA, S-GATE NIHONBASHI-HONCHO, and Hatchobori Sankei Building are the applicable properties.
*2 Tokyo Sankei Building, BREEZÉ TOWER, Shinagawa Seaside TS Tower, and the S-GATE Series (AKASAKA, NIHONBASI-HONCHO, and AKIHABARA) and Hitachi Kyusyu Building are
the applicable properties.
*3 Shinagawa Seaside TS Tower, Toyo Park Building, Omori Park Building, Hitachi Kyusyu Building, and Miyazakidai Garden Office are the applicable properties.
*4 Average rent (yen) = Rental and CAM revenue upon the most recent settlement / 6 months /Leasable area x Occupancy rate30

SANKEI REAL ESTATE Inc.

MEMO

31

SANKEI REAL ESTATE Inc.

4.

Financial Strategy

32

SANKEI REAL ESTATE Inc.

Financial Strategy - Financial Highlights (1) - Enhance the bank formation to maintain and improve a stable financial foundation
 Financing Highlights (as of October 1, 2021)

 Lender Composition (as of October 1, 2021)

Balance of interestbearing liabilities

51.2 billion yen

LTV

47.9%

Ratio of long-term
debt

75.6%

Ratio of fixedinterest rate

86.5%

0.35%

Average remaining
time to maturity

2.7 years

Average financing
interest rate Distribution map of average financing interest rates and averageremaining time to maturity of office J-REITs
1.0

0.9
Average financing
interest rate

0.8
0.7
0.6
0.5
0.4
0.3

(%)

SANKEI REALESTATE

0.2
1

2

3

4

5

6

7 (year)Average remaining time to maturity (year)

 LTV Ratio During Normal Operations
End of 5th FP
LTV

47.3%

End of 6thFP
47.3%

End of 7th FP
47.1%(Forecast)(Forecast)Enhance the bank formation through funding from new
financial institutions

Mizuho Bank
Sumitomo Mitsui
Banking
Development Bank ofJapanMizuho Trust & Banking
Sumitomo Mitsui TrustBank
Shinsei Bank

[Unit: million yen]
Borrowing
Percentage
amount13,160
25.7%
9,440

18.4%

7,700

15.0%

4,640

9.1%

4,500

8.8%

4,080

8.0%

Resona Bank

3,780

7.4%

Aozora Bank
The Nishi-Nippon CityBank
Kansai Mirai Bank

2,000

3.9%

1,000

2.0%

600

1.2%

300

0.6%

51,200100.0%

Chiba Bank
11 banks in total

33

SANKEI REAL ESTATE Inc.

Financial Strategy - Financial Highlights (2) - Consider early incorporation into global indices and obtainment of ratings in earnest
Scheduled to disclose the Semi Annual Report (English)
Seek to be incorporated into FTSE EPRA/NAREIT Global Index
earlyConsider obtaining ratings in earnest

 Promote the distribution and prolongation of the maturity ladder Maturity Ladder for Interest-Bearing Liabilities (as of October 1, 2021)
 Refinanced borrowing due in the 6th FP (October 1, 2021)

 Borrowings to acquire 4 new properties (September 2, 2021)
13.4 billion yen in total 6.2 billion yen at a fixed interest rate, 5 years

4.3 billion yen at a fixed interest rate, 4.5 years

6.2 billion yen at a fixed interest rate, 4 years
1 billion yen at a floating interest rate, 1 year

Refinancing results for the 5th FP(Unit: million yen)

7,000
1,000

6,000
5,000
4,000
3,000
2,000

4,800

5,600

5,900

4,300

6,200

5,900
4,300

3,700

4,800

6,200
4,300

3,300

1,000

0
5th FP

6th FP

7th FP

8th FP

Long-term borrowings

9th FP

10th FP

11th FP

12th FP

Short-term borrowing

13th FP

14th FP

15th FP

16th FP34

SANKEI REAL ESTATE Inc.

MEMO

35

SANKEI REAL ESTATE Inc.

5.

ESG Initiatives

36

SANKEI REAL ESTATE Inc.

ESG Initiatives (1)■ Participation in GRESB Real Estate Assessment (July 2021)

 Acquired “3 star” GRESB rating (October 2021)
 Acquired “Green Star” certification (October 2021)
 Consider enhancing the sustainability promotion system(establishment of a dedicated unit)
GRESB Real Estate Assessment: A global investment benchmark established as a tool tomeasure the environmental, social, and governance (ESG) considerations of individualcompanies and funds in the real estate sector and used to select investment targets andengage in dialogue with investment targets.

■ Various rules associated with ESG
Sustainability Policy(1)

Preserving the earth environment and reducing theenvironmental load of assets under management(4)

Working with executives and employees(2)Serving the local community(5)

Observing compliance and establishing/maintaining aninternal control system(3)

Cooperating with external stakeholders(6)

Disclosing ESG information and securing transparency

Internal regulations, policies, etc.

Sustainability Promotion System•

Chief Sustainability Officer: Executive Deputy President•

Sustainability promotion system rules•

Policy on saving water•

Sustainability Officer: General Manager of Investment Management Department•

Policy on energy conservation•

Policy on sustainable procurement•

Sustainability promotion meetings: Examining and planning various policies,
targets, and measures related to sustainability•

Policy on greenhouse gas emissions
reduction•

EMS operational manual37

SANKEI REAL ESTATE Inc.

5. ESG Initiatives (2)■ Environment■ Social

Acquired DBJ Green Building certification for 5 of 12 properties under management

Response to the COVID-19 Pandemic

Relationship with Stakeholders[Prevention]• Introduce remote work and staggered[Measures for employees]• Develop a comfortable office*(As of August 31, 2020)

S-GATE AKASAKA(60% quasi co-ownership interest)

S-GATE AKIHABARA

S-GATE NIHONBASHIHONCHO(51% co-ownership interest)

commuting
Prepare alcohol disinfectants at common
areas
Health management of property
management staff
Display posters for preventing the spreadof infection•••

BREEZÉ TOWERTokyo Sankei Building(45% quasi co-ownership interest in sectional ownership of theoffice portion of the building, etc.)(2% co-ownership interest)••

environment
Human resources development:
Implement various training
Work-style support: Childcare andnursing care support[Measures for tenants][When someone is infected with COVID-19] • Implement disaster prevention
drills, and distribute disaster• Identify the behavioral history of infectedprevention goods
persons and persons who had close contact• Conduct tenant satisfaction surveys
with them• Implement disinfection work at the office[Connection with the community]and common areas
Contact the tenants, etc. who use thebuilding••

Installation of artworks■Governance (Internal Control)Sponsor Commitment: Promotion of Same-Boat Investment by Sponsor
Major environmental initiatives[Tokyo Sankei Building]•••Installation of energy-saving and long-life LED
lighting
Installation of electric vehicle (EV) chargers
Installation of community cycle ports[S-GATE Series]••

Realized rooftop greening and established aterraceUse greenery at the entrance for an open andbright approach[BREEZÉ TOWER]•••Reduction of building heat load
Effective use of natural energy
Effective use of water resources andconsideration for surrounding
environment•

Sponsor acquires Sankei Real Estate’s investment units sequentially•This helps enhance same-boat investment between the sponsor and the unitholders of
SANKEI REAL ESTATE further and strong sponsor support is expected, which contributes
to the medium- to long-term growth of SANKEI REAL ESTATEEnd of 2nd FP

End of 3rd FP

End of 4th FP

End of 5th FP

Number of investment
units issued andoutstanding

356,800 units

356,800 units

356,800 units

356,800 units

Number of units heldby sponsor

11,362 units

14,979 units

17,479 units

17,479 units

Percentage of units
held by sponsor

3.18%

4.19%

4.89%

4.89%

38

SANKEI REAL ESTATE Inc.

Appendix

39

SANKEI REAL ESTATE Inc.

Balance Sheet (Unabridged) for the Fiscal Period Ended August 2021 (5th FP)(Unit: thousand yen)
4th FP
5th FP(as of Feb. 28, 2021) (as of Aug. 31, 2021)

4th FP
5th FP(as of Feb. 28, 2021) (as of Aug. 31, 2021)
AssetsCurrent assets
Cash and deposits
Cash and deposits in trust
Operating accounts receivable
Prepaid expenses
Consumption taxes receivable
Other
Total current assets
Non-current assets
Property, plant and equipment
Buildings
Accumulated depreciation
Buildings, net
Structures
Accumulated depreciation
Structures, net
Land
Buildings in trust
Accumulated depreciation
Buildings in trust, net
Structures in trust
Accumulated depreciation
Structures in trust, net
Machinery and equipment in trust
Accumulated depreciation
Machinery and equipment in trust, net
Tools, furniture and fixtures in trust
Accumulated depreciation
Tools, furniture and fixtures in trust , net
Land in trust
Construction in progress in trust
Total property, plant and equipment
Intangible assets
SoftwareTotal intangible assets
Investments and other assets
Long-term prepaid expenses
Deferred tax assets
Leasehold and guarantee deposits
Total investments and other assets
Total non-current assets
Deferred assets
Investment unit issuance expenses
Total deferred assets
Total assets

4,147,117
2,797,010
54,096
46,597
9,321
41,015
7,095,157

4,457,965
2,799,257
36,07959,212
77
7,352,593

166,032(11,908)
154,123
353
(16)
336
2,457,766
14,296,308(769,403)
13,526,905
23,602(1,122)
22,479
2,875
(348)
2,526
27,889(3,719)24,17056,132,321
8,103
72,328,733

169,301(15,201)
154,100
544
(25)
518
2,457,766
14,340,970(992,106)
13,348,864
23,832(1,435)22,396
11,302(564)
10,73728,239(5,727)22,51256,132,575
281,344
72,430,815

5,773
5,773

4,833
4,833

43,23713
10,00053,251
72,387,757

43,72413
10,00053,73872,489,387

79,482,915

6,488
6,488
79,848,468

Liabilities
Current liabilities
Operating accounts payable
Long-term borrowings due within 1 year
Accounts payable – otherAccrued expenses
Income taxes payable
Consumption taxes payable
Advances received
Deposits received
Total current liabilities
Non-current liabilities
Long-term borrowings
Leasehold and guarantee deposits received
Leasehold and guarantee deposits received in trust
Total non-current liabilities
Total liabilities
Net assets
Unitholders’ equity
Unitholders’ capital
Surplus
Unappropriated retained earnings (undisposed loss)

Total surplus
Total unitholders’ equity
Total net assets
Total liabilities and net assets

170,1129,100,000
219,582
26,175879
373,814
7,496
9,898,060

225,346
9,900,000
494,644
27,936875
89,208339,943
14,065
11,092,019

28,700,000
79,585
3,247,634
32,027,219
41,925,280

27,900,000
82,1393,219,176
31,201,315
42,293,334

36,540,901

36,540,901

1,016,734
1,016,734
37,557,635
37,557,635
79,482,915

1,014,232
1,014,232
37,555,134
37,555,134
79,848,468

40

SANKEI REAL ESTATE Inc.

Statement of Income (Unabridged) for the Fiscal Period Ended August 2021 (5th FP)(Unit: thousand yen)
4th FP

5th FP(ended Feb. 2021)(ended Aug. 2021)

2,015,771

2,032,902

Operating revenue
Leasing business revenue
Other leasing business revenue

132,163

143,210

2,147,934

2,176,113

Expenses related to leasing business

790,014793,758

Asset management fee

186,562

195,532

Asset custody fee

1,568

1,575

Administrative service fees

7,065

7,100

Remuneration for directors (and other officers)

3,600

3,600

Other operating expenses

40,51033,203

1,029,320

1,034,769

1,118,614

1,141,343

Total operating revenue
Operating expenses

Total operating expenses
Operating profit
Non-operating income
Interest income

21

31

-

994

Interest on refund-

50

Other non-operating income

015

Total non-operating income

21

1,091

Interest expenses

61,56566,412

Borrowing related expenses

37,66061,120Insurance claim income

Non-operating expenses

Other non-operating expenses

2,000

-

Total non-operating expenses

101,225

127,533

Ordinary profit

1,017,409

1,014,902

Net profit before income taxes

1,017,409

1,014,902

Income taxes - current

882

880

Income taxes - deferred

0

0

883

880

1,016,526

1,014,021

207

210

1,016,734

1,014,232

Total income taxes

Net profit
Retained earnings brought forward

Unappropriated retained earnings (undisposed loss)

41

SANKEI REAL ESTATE Inc.

Statement of Cash Flows for the Fiscal Period Ended August 2021 (5th FP)
4th FP(ended Feb. 2021)
Cash flows from operating activities
Net profit before income taxes
Depreciation
Interest income
Interest expenses
Decrease (increase) in operating accounts receivable
Decrease (increase) in consumption taxes refund receivable
Decrease (increase) in prepaid expenses
Increase (decrease) in operating accounts payable
Increase (decrease) in accounts payable – other
Increase (decrease) in consumption taxes payable
Increase (decrease) in advances received
Increase (decrease) in deposits received
Decrease (increase) in long-term prepaid expenses
Decrease (increase) in other assets
SubtotalInterest received
Interest paid
Income taxes paid
Net cash provided by (used in) operating activities
Cash flows from investing activities
Purchase of property, plant and equipment
Purchase of property, plant and equipment in trust
Proceeds from leasehold and guarantee deposits received
Refund of leasehold and guarantee deposits received
Proceeds from leasehold and guarantee deposits received in trust
Refund of leasehold and guarantee deposits received in trust
Net cash provided by (used in) investing activities
Cash flows from financing activities
Proceeds from long-term borrowings
Repayments of long-term borrowings
Payments of investment unit issuance expenses
Distribution paid
Net cash provided by (used in) financing activities
Net increase (decrease) in cash and cash equivalents
Cash and cash equivalents at beginning of period
Cash and cash equivalents at end of period(Unit: thousand yen)
5th FP(ended Aug. 2021)

1,017,409
228,057(21)
61,565
34,103(9,321)
5,300(54,667)
4,076(129,470)
45,256(1,197,677)
17,555
526,775
548,943
21(61,662)(896)
486,405

1,014,902
229,481(31)
66,412
20,672
9,321(12,615)
18,847
12,407
89,208(33,871)
6,568
(487)
40,937
1,461,754
31(64,651)(884)
1,396,250(493)(4,286,634)
81(12,724)
232,800(33,127)(4,100,099)(3,460)(28,670)
2,572
(19)
3,970
(35,084)(60,691)

4,300,000(902,512)
3,397,487(216,205)
7,160,333
6,944,127

4,800,000(4,800,000)(6,488)(1,015,975)(1,022,464)
313,095
6,944,127
7,257,223

42

SANKEI REAL ESTATE Inc.

Status of Lenders (as of October 1, 2021)
LenderBorrowing amount(million yen)Mizuho Bank, Ltd.

260

Sumitomo Mitsui Banking Corporation

140

Mizuho Bank, Ltd.
Sumitomo Mitsui Banking Corporation

400
200

Tota l1,000

Mizuho Bank, Ltd.
Sumitomo Mitsui Banking Corporation

400

Interest rate

Borrowing date (upper row)
Maturity date (lower row)

0.23545%

Sep. 2, 2021

(fl oa ti ng)

Aug. 31,2022

0.23545%(fl oa ti ng)

Sep. 2, 2021
Aug. 31,2022

Repayment
methodDescription

Term

LenderMizuho Bank, Ltd.

Lump-sum
repayment atmaturity

Unsecured
Nonguaranteed

Sumitomo Mitsui Banking Corporation

Borrowing amount(million yen)713

Mizuho Trust & Banking Co., Ltd.
Sumitomo Mitsui Trust Bank, Ltd.

456
416

1,574

Shinsei Bank, Limited

358

Resona Bank, Limited

Development Bank of Japan Inc.

1,084
929

358
1,331

Mizuho Trust & Banking Co., Ltd.

593

Sumitomo Mitsui Trust Bank, Ltd.

542

Shinsei Bank, Limited
Resona Bank, Limited

Mizuho Bank, Ltd.

0.36969%

Ma r. 12, 2019

Sumitomo Mitsui Banking Corporation(fi xed)

Ma r. 12, 2022

Development Bank of Japan Inc.

929
796

439

Mizuho Trust & Banking Co., Ltd.

509

439

Sumitomo Mitsui Trust Bank, Ltd.

Mizuho Bank, Ltd.

972

Shinsei Bank, Limited

465
385

Sumitomo Mitsui Banking Corporation

716
614

Resona Bank, Limited

Development Bank of Japan Inc.
Mizuho Trust & Banking Co., Ltd.

392

Sumitomo Mitsui Trust Bank, Ltd.

358

Shinsei Bank, Limited
Resona Bank, Limited

324
324

Mizuho Bank, Ltd.

856

Sumitomo Mitsui Banking Corporation

639

Development Bank of Japan Inc.

548

Mizuho Trust & Banking Co., Ltd.

350

Sumitomo Mitsui Trust Bank, Ltd.

319

Shinsei Bank, Limited

294
294

Resona Bank, Limited

5,600

3,700

1,550
1,000

0.42346%

Ma r. 12, 2019

Sumitomo Mitsui Banking Corporation(fi xed)

Ma r. 12, 2023

Development Bank of Japan Inc.

700

Mizuho Trust & Banking Co., Ltd.

600
500

3,300

0.49096%

Ma r. 12, 2019

(fi xed)

Ma r. 12, 2024

Lump-sum
repayment atmaturity

Unsecured
Nonguaranteed

Shinsei Bank, Limited
Resona Bank, Limited

500
400

The Nishi-Nippon City Bank

500

Kansai Mirai Bank
Chiba Bank

300
150

Mizuho Bank, Ltd.

750

Sumitomo Mitsui Banking Corporation

700

Mizuho Bank, Ltd.

2,250

Development Bank of Japan Inc.

700

Sumitomo Mitsui Banking Corporation

1,500

Mizuho Trust & Banking Co., Ltd.

200

Sumitomo Mitsui Trust Bank, Ltd.

500

Shinsei Bank, Limited

500
400

Mizuho Trust & Banking Co., Ltd.
Sumitomo Mitsui Trust Bank, Ltd.

620
550

Shinsei Bank, Limited

490

Resona Bank, Limited

Resona Bank, Limited

490

Aozora Bank

Mizuho Bank, Ltd.

950
800

The Nishi-Nippon City Bank

500

Kansai Mirai Bank

300
150

Sumitomo Mitsui Banking Corporation
Development Bank of Japan Inc.

2,000

Mizuho Trust & Banking Co., Ltd.
Sumitomo Mitsui Trust Bank, Ltd.

620
550

Shinsei Bank, Limited
Resona Bank, Limited

5,900

0.25727%(fl oa ti ng)

Sep. 3, 2019
Sep. 3, 2022

0.36200%(fi xed)

Sep. 3, 2019
Sep. 3, 2023

Mizuho Bank, Ltd.

0.32923%(fi xed)

Ma r. 12, 2020
Sep. 12, 2024

4,800

0.36978%

Ma r. 12, 2021

(fi xed)

Ma r. 12, 2025

0.29655%

Sep. 2, 2021

(fi xed)

Sep. 2, 2025

Description

6,200

Lump-sum
repayment atmaturity

Unsecured
Nonguaranteed

6,200

0.35542%

Sep. 2, 2021

(fi xed)

Sep. 2, 2026

0.38044%

Oct. 1, 2021

(fi xed)Apl . 1,2026

1,100

Sumitomo Mitsui Banking Corporation

900

490

Development Bank of Japan Inc.

700

490

Mizuho Trust & Banking Co., Ltd.

300

Sumitomo Mitsui Trust Bank, Ltd.

300

Shinsei Bank, Limited

300

Resona Bank, Limited

200
500

* If the maturity date is not a business day, it will be the following business day.

4,300

Repayment
method1,500

Chiba Bank

5,900

Borrowing date (upper row)
Maturity date (lower row)

385

Mizuho Bank, Ltd.

Sumitomo Mitsui Trust Bank, Ltd.

Interest rate

1,167
832

Development Bank of Japan Inc.

600

Long-term borrowings

Long-term borrowings

Short-termborrowings

Term

Aozora Bank
Sub Total

50,200Total

51,2004,300

43

SANKEI REAL ESTATE Inc.

Key Performance Indicators (KPIs) for the Fiscal Period Ended August 2021 (5th FP)
4th FP

5th FP

4th FP

5th FP(ended Feb. 2021)(ended Aug. 2021)(ended Feb. 2021)(ended Aug. 2021)(against total assets)

47.6%

47.3%

Distribution per unit

2,849 yen

2,862 yen(against total assets<considering unrealized
gain/loss>)

43.8%

43.4%

Distribution yield

5.2%

4.4%

(against book value)

4.4%

4.5%

ROE

5.4%

5.4%

(against appraisal value)

4.0%

4.1%

Net assets per unit

105,262 yen

105,255 yen(against book value)

3.8%

3.8%

NAV per unit

124,489 yen

125,369 yen(against appraisal value)

3.4%

3.5%

Investment unit price (at end of period)

110,200 yen

129,600 yen(NOI yield)

4.3%

4.0%

NAV multiple

0.9x

1.0x

(NOI yield after
depreciation)

3.7%

3.5%

PBR

1.0x

1.2x

FFO

1,243 million
yen

1,242 million
yen

PER

19.3x

22.8x

AFFO

1,201 million
yen

1,185 millionyen

FFO multiple

15.8x

18.6x

3,485 yen

3,482 yen

(FFO)

81.7%

82.2%

(AFFO)

84.6%

86.1%

LTV

NOI yield

NOI yield after
depreciation

Implied cap rate

FFO per unit

Payout ratio
EPS

2,849 yen

2,841 yen

*1. LTV (against total assets) = Interest-bearing liabilities / Total assets (book value)
LTV (against total assets <considering unrealized gain/loss>) = Interest-bearing liabilities / (Total assets(book value) + unrealized gain/loss)*2. NOI yield (against book value) = (Operating income from real estate leasing + Depreciation) /Book valueof real estate for lease
NOI yield (against appraisal value) = (Operating income from real estate leasing + Depreciation) /Appraisal value of real estate for lease*3. NOI yield after depreciation (against book value) = Operating income from real estate leasing / Book
value of real estate for lease
NOI yield after depreciation (against appraisal value) = Operating income from real estate leasing /Appraisal value of real estate for lease*4. Implied cap rate (NOI yield) = NOI (Annualized result of current FP x 2) / (Total fair value +Interestbearing liabilities – Cash and deposits + Leasehold deposits received)
Implied cap rate (NOI yield after depreciation) = NOI after depreciation (Annualized result of current FPx2) / (Total fair value + Interest-bearing liabilities – Cash and deposits + Leasehold deposits received)*5. FFO = Net profit + Depreciation – Gain/loss on sales of real estate properties (including loss onretirement of non-current assets)*6. AFFO = FFO – Capital expenditure*7. FFO per unit = FFO / Total number of investment units issued and outstanding at end of period*8. EPS = Net profit / Total number of investment units issued and outstanding at end of period*9. Distribution per unit = Total distribution / Total number of investment units issued andoutstanding at end of period*10. Distribution yield = Distribution per unit (Annualized result of current FP x 2) / Investment
unit price (at end of period)*11. ROE (Return on equity) = Net profit (Annualized most recent result x 2) / Net assets*12. NAV per unit = (Net assets + Unrealized gain/loss) / Total number of investment units
issued and outstanding at end of period*13. NAV multiple = Investment unit price (at end of period) / NAV per unit
*14. PBR (Price Book-value Ratio) = Investment unit price (at end of period) / Net assets perunit*15. PER (Price Earnings Ratio) = Investment unit price (at end of period) / EPS (Annualized
most recent result x 2)
*16. FFO multiple = Investment unit price / FFO per unit (Annualized most recent result x 2)
*17. Payout ratio (FFO) = Total distribution / FFO*18. Payout ratio (AFFO) = Total distribution / AFFO
*19. Figures are rounded down to the indicated digits (Percentages and multiples are rounded
to one decimal place.)

44

SANKEI REAL ESTATE Inc.

Statement of Income from Leasing by Property for the Fiscal Period Ended August 2021 (5th FP)(Unit: thousand yen)
Property number

A-1

A-2

A-3

A-4

A-5

A-6

Asset type

Office buildings

Office buildings

Office buildings

Office buildings

Office buildings

Office buildings

BREEZÉ TOWER

S-GATENIHONBASHIHONCHO

S-GATEAKIHABARA

HibiyaSankei Building

Hatchobori
Sankei Building

Property nameTokyo
Sankei Building

Leasing business revenue

51,775545,909

159,964

68,236

204,797

179,306

Rental revenue

45,860432,224

153,523

65,353

178,517

148,555

CAM revenue

2,021

87,770--13,232

13,790Utilities reimbursement

2,598

16,806

3,877

2,447

9,975

9,213

Parking revenue

786

8,022

2,426

384

1,932

6,246

Other rental revenue

508

1,084

137

52

1,140

1,499

Expenses related toleasing business

29,934

205,630

47,11325,42390,99957,650Outsourcing expenses

6,197

63,056

8,568

6,019

16,566

16,844

Utilities expenses

3,072

33,470

4,807

2,499

8,376

11,026

Property taxes

12,571

37,257

11,0484,808

53,67910,084

683

1,135

-

-

-

-

Repair expenses

1,696

3,933

3,792

3,773

5,684

2,569

Insurance premium

100

853

329

151

291

441

-

112

250

250

250

250

Depreciation

3,302

64,024

18,036

7,623

5,885

15,957

Other expenses fromleasing
Operating income (loss)
from leasing

2,311

1,786

280

296

265

477

21,841

340,278

112,851

42,813

113,797

121,655

25,143404,302130,888

50,437

119,683

137,613

Land rent

Trust fee

NOI

* The information is “Not disclosed” due to unavoidable circumstances in that such contains information for which consent for disclosure has not beenobtained from the tenant, relevant party, etc. or information from which confidential information can be derived.

45

SANKEI REAL ESTATE Inc.

Statement of Income from Leasing by Property for the Fiscal Period Ended August 2021 (5th FP)(Unit: thousand yen)
Property number

A-7

A-8

A-9

A-10

B-1

B-2

Asset type

Office buildings

Office buildings

Office buildings

Office buildings

Sub assets

Sub assets

Property name

Toyo
Park Building

Shinagawa Seaside
TS Tower*1

Omori
Park Building

S-GATE AKASAKA

Hotel Intergate
Tokyo Kyobashi

Hotel Intergate
Hiroshima

Total

109,936

159,212206,955

118,800

2,176,113

Rental revenue

69,086

131,167

206,955

118,800

1,890,879

CAM revenue

15,171

10,037--142,022

Utilities reimbursement

6,341

11,818--89,327

Parking revenue

2,340

5,400

-

-

31,102Other rental revenue

16,997--22,78054,384

43,529793,758

Leasing business revenue

Expenses related toleasing business

32,974(Not
disclosed)

789
65,425(Not
disclosed)

Outsourcing expenses

8,310

13,961

1,200

1,800

169,652

Utilities expenses

7,589

15,496--116,632

Property taxes

7,619

16,50825,58915,378223,015

-

-

-

-

1,818

Repair expenses

564

3,048

-

-

39,331

Insurance premium

231

425

533

475

4,354

Trust fee

350

350

250

250

2,752

26,77025,572

228,541

41

53

7,658

Land rent

Depreciation
Other expenses fromleasing
Operating income (loss)
from leasing
NOI

8,110

30,258198

15,248

7,751

388

76,962

167,147

93,786

63,376

152,571

75,2701,382,355

85,073

197,406

109,035

71,128179,341

100,842

1,610,896* The information is “Not disclosed” due to unavoidable circumstances in that such contains information for which consent for disclosure has not beenobtained from the tenant, relevant party, etc. or information from which confidential information can be derived.

46

SANKEI REAL ESTATE Inc.

Overview of Appraisal Value (as of August 31, 2021)(Unit: million yen)

Property
number

Property nameAcquisition
price

End of 5th FP
Book value (a)End of 4th FP

End of 5th FP(February 28, 2021) (b)AppraisalCR
value(August 31, 2021) (c)AppraisalCR
value

Change from appraisal in theprevious fiscal period(c)－(b)AppraisalCR
value

Unrealized
gain/loss(c)－(a)Tokyo Sankei Building(2% co-ownership interest)
BREEZÉ TOWER(45% quasi co-ownership interest in sectional
ownership of the office portion of the building,etc.)
S-GATE NIHONBASHI-HONCHO(51% co-ownership interest)

2,509

2,612

2,690

2.5%

2,690

2.5%

0

0.0pt

77

13,10013,076

17,235

3.8%

17,280

3.8%

45

0.0pt

4,203

6,698

6,707

7,470

3.3%

7,470

3.3%

0

0.0pt

762

A-4

S-GATE AKIHABARA

2,055

2,051

2,530

3.5%

2,530

3.5%

0

0.0pt

478

A-5

Hibiya Sankei Building

5,829

6,057

6,340

3.0%

6,410

3.0%

70

0.0pt

352

A-6

Hatchobori Sankei Building

4,959

5,011

5,500

4.1%

5,500

4.1%

0

0.0pt

488

A-7

Toyo Park Building

3,782

3,892

3,610

4.0%

3,610

4.0%

0

0.0pt

-282

A-8

Shinagawa Seaside TS Tower(25% quasi co-ownership interest in sectional
ownership of the building, etc.)

10,04010,107

11,000

3.6%

11,000

3.6%

0

0.0pt

892

A-9

Omori Park Building

5,400

5,463

5,490

3.8%

5,490

3.8%

0

0.0pt

26

A-10

S-GATE AKASAKA(60% quasi co-ownership interest in sectional
ownership of the building, etc.)

4,200

4,242

4,266

3.2%

4,266

3.2%

0

0.0pt

23

58,574

59,221

66,131

A-1

A-2

A-3

Office buildings subtotal (total of 10 properties)

66,246

115

7,024

B-1

Hotel Intergate Tokyo Kyobashi

8,961

8,978

8,970

3.8%

9,010

3.8%

40

0.0pt

31

B-2

Hotel Intergate Hiroshima

3,990

3,949

4,080

4.6%

4,070

4.6%

-10

0.0pt

120

Sub assets subtotal (total of 2 properties)

12,951

12,927

13,05013,08030

152

Portfolio total (total of 12 properties)

71,525

72,14979,181

79,326145

7,176* CR is a cap rate based on direct capitalization method (NCF basis).

47

SANKEI REAL ESTATE Inc.

Status of Unitholders (as of August 31, 2021)
 Breakdown of Investment Units by Unitholder Type  Major Unitholders
100%
90%
80%
70%
60%

Financial institutions

Securities companies

Other Japanese corporations

Non-Japanese corporations, etc.

13.22%

16.88%

14.68%

14.31%

13.93%

11.66%

15.63%

14.52%

14.24%

15.62%

4.52%
1.22%

5.53%
1.14%

6.25%
1.24%

5.96%
2.57%

6.75%
1.49%

Number ofunits owned(units)Share of units
owned
(%)

The Master Trust Bank of Japan, Ltd. (Trust
Account)

75,20121.07%

Custody Bank of Japan, Ltd. (Trust Account)

66,28718.57%The Nomura Trust and Banking Co., Ltd.
(Investment Trust Account)

21,876

6.13%

Custody Bank of Japan, Ltd. (Security
Investment Trust Account)

20,473

5.73%

The Sankei Building Co., Ltd.

17,479

4.89%

BNP PARIBAS SECURITIES SERVICESLUXEMBOURG/JASDEC/SECURITIES-AIFM

12,053

3.37%

BNYM SA/NV FOR BNYM FOR BNY GCM CLIENT
ACCOUNTS M LSCB RD

9,250

2.59%

Aozora Bank, Ltd.

8,079

2.26%

SCBHK AC LIECHTENSTEINISCHELANDESBANK AG

5,727

1.60%

The Bank of Yokohama, Ltd.

5,036

1.41%

241,461

67.67%Name of unitholder

Individuals/Other

50%
40%
30%

63.19%

64.48%

63.92%

64.31%

62.61%

20%
10%0%
End of 1st FP End of 2nd FP End of 3rdt FP End of 4th FP End of 5th FP

 Number of Unitholders by Unitholder TypeEnd of 1st FP End of 2nd FP End of 3rd FP End of 4th FP End of 5th FP
Financial institutions

37

55

54

49

43

Securities companies

17

19

23

22

22

Other Japanese
corporations
Non-Japanese
corporations, etc.

116

127

131

135

124

57

62

59

70

75

Individuals/Other

6,399

7,585

7,458

7,406

7,064

Total

6,626

7,848

7,725

7,682

7,328

Total
* Each share above is rounded down to two decimal place.

48

SANKEI REAL ESTATE Inc.

Portfolio List (1) (as of September 30, 2021)
Property number

A-1

A-2

A-3

A-4

A-5

A-6

A-7

Asset type

Office buildings

Office buildings

Office buildings

Office buildings

Office buildings

Office buildings

Office buildings

Property nameTokyo
Sankei Building

BREEZÉ TOWER

S-GATENIHONBASHI-HONCHO

S-GATEAKIHABARA

HibiyaSankei Building

Hatchobori
Sankei Building

ToyoPark Building(2% co-ownershipinterest)(45% quasi co-ownershipinterest in sectional ownershipof the office portion of thebuilding, etc.)(51% co-ownershipinterest)

Chiyoda-ku, Tokyo

Kita-ku, Osaka-shi

Chuo-ku, Tokyo

Chiyoda-ku, Tokyo

Chiyoda-ku, Tokyo

Chuo-ku, Tokyo

Koto-ku, Tokyo

Acquisition dateMar. 12, 2019

① Mar. 12, 2019
② Sep. 3, 2019

Mar. 12, 2019

Mar. 12, 2019

Mar. 12, 2019

Mar. 12, 2019

Mar. 12, 2019

Acquisition price

2,509 million yen

13,100 million yen

6,698 million yen

2,055 million yen

5,829 million yen

4,959 million yen

3,782 million yen

Appraisal value

2,690 million yen

17,280 million yen

7,470 million yen

2,530 million yen

6,410 million yen

5,500 million yen

3,610 million yen

Appraisal NOI yield(Appraisal NOI/Acquisition
price)

2.9%

5.5%

3.8%

4.4%

3.7%

5.1%

4.0%

Construction completion

Sep. 2000

Jul. 2008

Oct. 2018

Sep. 2017

Jun. 1992

Sep. 1965

Jun. 1991

Occupancy rate

93.7%

99.8%

100.0%

100.0%

100.0%

100.0%

42.6%

PML value

2.3%

2.8%

2.0%

2.2%

3.1%

0.3%

9.0%

Location49

SANKEI REAL ESTATE Inc.

Portfolio List (2) (as of September 30, 2021)
Property number

A-8

A-9

A-10

A-11

A-12

B-1

B-2

Asset type

Office buildings

Office buildings

Office buildings

Office buildings

Office buildings

Sub assets

Sub assets

Property nameShinagawa Seaside
TS Tower

Omori
Park Building

S-GATEAKASAKA

Miyazakidai
Garden OfficeHitachi Kyusyu
Building

Hotel Intergate
Tokyo Kyobashi

Hotel Intergate
Hiroshima(50% quasi co-ownershipinterest in sectional ownershipof the building, etc.)(80% quasi co-ownershipinterest)

Shinagawa-ku, Tokyo

Ota-ku, Tokyo

Minato-ku, Tokyo

Miyamae-ku,
Kawasaki-shi

Sawara-ku,
Fukuoka-shi

Chuo-ku, Tokyo

Naka-ku,
Hiroshima-shi

Acquisition date

① Sep. 3, 2019
② Sep. 2, 2021

Sep. 3, 2019

① Oct. 1, 2020
② Sep. 2, 2021

Sep. 2, 2021

Sep. 2, 2021

Mar. 12, 2019

Sep. 3, 2019

Acquisition price

20,940 million yen

5,400 million yen

5,600 million yen

2,800 million yen

10,000 million yen

8,961 million yen

3,990 million yen

Appraisal value

22,000 million yen

5,490 million yen

5,688 million yen

2,830 million yen

10,200 million yen

9,010 million yen

4,070 million yen

Appraisal NOI yield(Appraisal NOI/Acquisition
price)

4.1%

4.1%

3.3%

5.0%

4.8%

3.9%

4.9%

Construction completion

Jul. 2003

May 1993

Jul. 2015

Feb. 1993

Feb. 1996

Jan. 2018

Oct. 2018

Occupancy rate

100.0%

95.5%

100.0%

100.0%

100.0%

100.0%

100.0%PML value

3.2%

5.6%

4.6%

9.5%

2.5%

1.8%

2.1%

Location

PML value (average)

1.5%

50

SANKEI REAL ESTATE Inc.

Portfolio Matrix (1) (as of September 30, 2021)<Cap. Rate (Appraisal NOI Yield) x Area>

Area

Appraisal
NOI
CAP
Less than
3.0%
Less than
3.5%

Area
(Unit: million yen)
Total
Other ordinance-designatedacquisition
citiespriceCore cities, major regional(Overall ratio)
citiesCentral 3 wards of Tokyo

Tokyo 23 wards

Greater Tokyo(Chiyoda, Chuo, and Minato
wards)(Other than the central 3 wards ofTokyo)
Property name
Building age, walking
Acquisition pricetime from station(Excluding Tokyo)

Nagoya-shi

Property name
Building age, walking
Acquisition pricetime from station

Property name
Building age, walking
Acquisition pricetime from station

Property name
Building age, walking
Acquisition pricetime from station

Osaka-shi

Property name
Building age, walking Acquisition
time from station
priceTokyo Sankei Building

2,509

21 years old,
1-minute walk

2,509

(2.6%)

5,600(5.8%)S-GATE AKASAKA
6 years old,
1-minute walk

5,600

Hibiya Sankei Building

Cap. Rate

29 years old,
1-minute walkLess than
4.0%

5,829

S-GATE NIHONBASHI-HONCHO
2 years old,
4-minute walk

21,4896,698(22.2%)

Hotel Intergate Tokyo Kyobashi
3 years old,
1-minute walk

8,961

S-GATE AKIHABARA
4 years old,
5-minute walk

2,055

Less than
4.5%

Shinagawa Seaside TS Tower
18 years old,
1-minute walk

20,940Omori Park Building

32,17728 years old,
3-minute walk

(33.3%)

5,400

Toyo Park Building
30 years old,
9-minute walk

3,782

Hitachi Kyusyu building
25 years old,
17-minute walkLess than
5.0%

10,00013,990Hotel Intergate Hiroshima(14.5%)

2 years old,
3-minute walk
5.0%
or moreHatchobori Sankei Building
56 years old,
3-minute walkMiyazakidai Garden Office
28 years old,
3-minute walk

4,959

2,800

BREEZÉ TOWER
13 years old,
3-minute walk

3,990
20,85913,100(21.6%)

Total
acquisition
price36,61330,1222,800

13,10013,99096,625(Overall ratio)(37.9%)(31.2%)(2.9%)(13.6%)(14.5%)(100.0%)

Typical Floorplate * Office Buildings Only
400 tsubos
or moreLess than 400 tsubos, but
200 tsubos or more

Less than 200 tsubos, but
100 tsubos or more

Less than 100
tsubos51

SANKEI REAL ESTATE Inc.

Portfolio Matrix (2) (as of September 30, 2021)<Typical floorplate x Area>
Area(Unit: million yen)
Area

Central 3 wards of Tokyo

Tokyo 23 wards

Greater Tokyo(Chiyoda, Chuo, and Minato wards) (Other than the central 3 wards of Tokyo)
Typicalfloorplate(tsubo)400 tsubos
or moreTypical floorplate (tsubo)

Less than
400 tsubos
300 tsubos
or moreLess than
300 tsubos
200 tsubos
or moreProperty name
Building age, walking
time from station

Property nameAcquisition priceTokyo Sankei Building
21 years old,
1-minute walk

2,509

Building age, walking
time from station

Acquisition price18 years old,
1-minute walk

4,959

Property nameAcquisition price

Building age, walking
time from station

Miyazakidai Garden Office

5,400

28 years old,
3-minute walk

Building age, walking
time from station

Acquisition
price36,54913,100(37.8%)

Hitachi Kyusyu building
25 years old,
17-minute walk

2,800

Toyo Park Building
30 years old,
9-minute walk

Property nameAcquisition price

BREEZÉ TOWER
13 years old,
3-minute walk

20,940Omori Park Building

56 years old,
3-minute walk

Nagoya-shi

Property nameShinagawa Seaside TS Tower

28 years old,
3-minute walk

Hatchobori Sankei Building(Excluding Tokyo)
Building age, walking
time from station

Total
Other ordinance-designatedacquisition
citiespriceCore cities, major regional cities (Overall ratio)

Osaka-shi

10,000 (18.8%)

Hotel Intergate Hiroshima
2 years old,
3-minute walk

3,782

18,20012,732

3,990 (13.2%)

S-GATE NIHONBASHI-HONCHO
2 years old,
4-minute walk

6,698

Hibiya Sankei Building
Less than
200 tsubos
100 tsubos
or more29 years old,
1-minute walk

5,829

27,089S-GATE AKASAKA
6 years old,
1-minute walk

(28.0%)
5,600

Hotel Intergate Tokyo Kyobashi
3 years old,
1-minute walkLess than
100 tsubos

8,961

S-GATE AKIHABARA
4 years old,
5-minute walkTotalacquisition
price(Overallratio)

2,055

2,055

(2.1%)

42,01324,7222,800

13,10013,99096,625(43.5%)(25.6%)(2.9%)(13.6%)(14.5%)(100.0%)

Typical Floorplate * Office Buildings Only (Construction area is used as reference value for hotels)
400 tsubos
or moreLess than 400 tsubos, but
200 tsubos or more

Less than 200 tsubos, but
100 tsubos or more

Less than 100
tsubos52

SANKEI REAL ESTATE Inc.

Portfolio Status (as of September 30, 2021)
SANKEI REAL ESTATE’s high-quality portfolio is supported by strong sponsor support

Sponsor support rate 100%

Percentage by Walking Time to the Nearest Station

More than
30 years

14.3%

9.1%

Average

3.9
minutes

Percentage by Typical Floorplate (Office Buildings)

Percentage by Building Age

More than 5 minutes

More than 3 minutes,
but within 5 minutes

5.1%

Within 1
minuteMore than 20 years,
but within 30 years

31.4%

Within 10
years

28.3%

21.7%

Average
More than
10 years,
but within
15 yearsWithin 3 minutes
Within 5 minutes

Within 10 years

10.4%

77%
86%
0% 20% 40% 60% 80% 100%

Within 20 years

Large-scale buildings

95%
0%

43.7%

21.8%

63%

Within 30 years

400
tsubosor more300 tsubos or more,
but less than 400 tsubos

13.6%

28%
42%

Within 15 years

320.4
tsubos

200 tsubos or more,
but less than 300 tsubos

21.7%
45%

2.5%

100 tsubos or more
Less than 200 tsubos

Average

More than 15 years,
but within 20 years

31.3%

Less than
100 tsubos

18.3
years

45.4%

More than 1 minute,but within 3 minutes

Within 1 minute

Large

New

Close

20% 40% 60% 80% 100%76%

Large buildings*

98%

0% 20% 40% 60% 80%100%* Calculated based on the definition of “Large-scale buildings: 200 tsubos or more” and “Large buildings: 100 tsubos or more, but less than 200 tsubos” made by Sanko Estate Co., Ltd.

53SANKEI REAL ESTATE Inc.

Status of Lease Agreements (as of September 30, 2021; based on leased area after considering ownership interest)
Percentage by Contract Form

Percentage by Lease Period

Percentage by Lease Period(including hotels)(excluding hotels)

10 years or more
10 years or more
19.2%

Less than 3 years
29.5%

4.9%
Less than 3 years
34.7%

Ordinary building leaseagreement

44.7%

Average*1

Average*1

55.3%

Fixed-term building leaseagreement

6.4 years

4.0 years 45.6%

12.6%
3 years or more, butless than 5 years

38.7%
5 years or more, butless than 10 years

Percentage by Business Type

Percentage by Business TypeTransportation & communications 1.9%
Wholesale & retail 2.2%

Game 2.0% Others 2.3%
Materials 2.0%
Precision devices 2.1%

5.1%

Service 10.8%
 Toyo Sangyo
 Yokogawa Solution Service
 NEC Facilities, etc.

Hotel
 GRANVISTA Hotels & Resorts(100% subsidiary of sponsor)

15.1%(Manufacturing)

Others 3.4%

IT 4.3%
Construction & real estate

14.9%
3 years or more, butless than 5 years

5 years or more, butless than 10 years

Pharmaceuticals
8.1%
 Bayer Yakuhin, etc.

57.3%

Food
 NH Foods, etc.

Manufacturing

9.0%

74.6%

General electrical appliance manufacturers
and electronics manufacturers
 Sony Group Hitachi, etc.

54

SANKEI REAL ESTATE Inc.

Top End Tenants by Leased Area (as of September 30, 2021)

Business type

Total leased
area
(m²)

% of
portfolio’s
total leased
area

Hitachi, Ltd.

Manufacturing(general electricalappliances)

26,513.3

26.75%

Hitachi Kyusyu Building

Sony Group Corporation

Manufacturing(general electricalappliances)

Not disclosed

Not
disclosed

Shinagawa Seaside TS Tower

Hotels15,166.7

15.30%

Hotel Intergate Tokyo Kyobashi
Hotel Intergate Hiroshima

NH Foods Ltd.

Manufacturing(food)

Not disclosed

Not
disclosed

BREEZÉ TOWER

Bayer Yakuhin, Ltd.

Manufacturing(pharmaceutical)

Not disclosed

Not
disclosed

BREEZÉ TOWER

Konoike Construction Co., Ltd.

Construction

2,542.7

2.57%

S-GATE NIHONBASHI-HONCHO

Hakuhodo DY Holdings Inc.

Services(advertising)

2,517.7

2.54%

S-GATE AKASAKA

Toyo Sangyo Co., Ltd.

Services(equipment maintenance)

1,509.7

1.52%

Omori Park Building

Yokogawa Solution Service Corporation

Services(equipment maintenance)

Not disclosed

Not
disclosed

BREEZÉ TOWER

Manufacturing(electronics)

1,157.7

1.17%

Miyazakidai Garden Office

Name of end tenant

GRANVISTA Hotels & Resorts Co., Ltd.

Oki Electric Industry Co., Ltd.

Property name

* The information is “Not disclosed” due to unavoidable circumstances in that such contains information for which consent for disclosure has not been obtained from the tenant, relevant party, etc.
or information from which confidential information can be derived.

55

SANKEI REAL ESTATE Inc.

Profile of the Asset Management Company

Trade name

Sankei Building Asset Management Co., Ltd.

Established

April 13, 2018

Capital

100 million yen

Financial instruments
business registration

Director-General of the Kanto Local Finance Bureau Registration(FIBO) No. 3094

The Sankei Building Co., Ltd. 100%

Real estate brokerage
licenseGovernor of Tokyo License (1) No. 102209

Investment management business, investment advisory andagency business, type II financial instruments business

Discretionary transaction
agency, etc. approval

Minister of Land, Infrastructure, Transport and Tourism ApprovalNo. 125

Shareholder composition
Main line of businessDirectors and auditors

5 directors
1 auditor

General Meeting of Shareholders

AuditorBoard of Directors

Investment Committee

Compliance Committee

President and CEO

Internal Audit Office

Investment Management Department
SANKEI REAL ESTATE Inc.
・Investment policy planning・Acquisition and sale of assets
under management
・Operation and management ofassets under management

Compliance OfficeFinance & IR Department

・Corporate planning, accounting
and general affairs
・Financials and IR

Fund Management Department
Private equity real estate funds, etc.
・Investment policy planning・Acquisition and sale of assets
under management
・Operation and management ofassets under management

56

SANKEI REAL ESTATE Inc.

Notes
Unless otherwise specified, the figures in this document are rounded down to the nearest unit and percentages a rounded to one decimal place.
Page 3
1. “Asset size” is the total acquisition price(*) rounded to the nearest 100 million yen. The same applies below.
*“Acquisition price” is the acquisition price(***) of assets after acquisition(**).
** “Assets after acquisition” are assets held by SANKEI REAL ESTATE as of the date of this document. Within “assets after acquisition,” “acquired assets” are assets acquired by SANKEI REAL ESTATE as stated on page 9 of thisdocument, and “assets before acquisition” are assets owned by SANKEI REAL ESTATE before the acquisition of the “acquired assets.” The same applies below.
*** “Acquisition price” is calculated as the transaction price of properties and trust beneficiary rights shown on the transaction agreement pertaining to each of the assets after acquisition rounded down to the nearest million
yen. Furthermore, “total acquisition price” is rounded down to the nearest hundred million yen. The transaction prices do not include consumption taxes, local consumption taxes or expenses required for acquisition. The
same applies below.
2. “Distributions in excess of earnings” were 7,136,000 yen as a refund of investment that falls under distribution regarding investment under tax law and distributions in excess of earnings per unit were 20 yen due to a decrease in net
profit resulting from the recording of temporary borrowing-related expenses associated with the implementation of borrowing for the acquisition of ownership interest in real estate trust beneficiary rights of 4 properties on
September 2, 2021. This distributions in excess of earnings is based on the policy on cash distribution in excess of earnings specified in Article 36, Paragraph 2 of the articles of incorporation of SANKEI REAL ESTATE.
3. “GRESB” is the name of an annual benchmark assessment measuring consideration for the environment, society and governance (ESG) in real estate funds, and the organization that manages this. It was founded in 2009 by a group ofmajor European pension funds leading the Principles for Responsible Investment (PRI). There are currently 140 investor members utilizing GRESB data in the selection of investment targets and dialogue with investment targets, andseveral institutions in Japan, including the Government Pension Investment Fund (GPIF) use GRESB assessment results. 1,520 listed and unlisted real estate companies and funds participated in the 2021 GRESB Real Estate Assessment
assessing real estate companies and funds. The same applies below.
4. “Global Index” is an index used globally by institutional investors in Japan and abroad as a benchmark for investment in equities, etc.
Page 9
1. “Sponsor support rate” is the percentage (on an acquisition price basis) of sponsor-owned properties or those acquired by using sales information on properties owned by third parties provided based on a sponsor support agreement.
The same applies below.
2. Shinagawa Seaside TS Tower is 25% quasi co-ownership interest in sectional ownership of the building, etc. and S-GATE AKASAKA is 20% quasi co-ownership interest.
3. The figures shown for Shinagawa Seaside TS Tower, Hitachi Kyusyu Building, S-GATE AKASAKA and Miyazakidai Garden Office are the “acquisition price.”
4. “After acquisition” refers to the condition as of September 2, 2021, after adding the acquired assets Shinagawa Seaside TS Tower, Hitachi Kyusyu Building, S-GATE AKASAKA and Miyazakidai Garden Office shown in this document tothe assets before acquisition as of August 31, 2021. The same applies below.
5. The Asset Management Company has concluded a sponsor support agreement with the sponsor for receiving support providing sale information on properties and various other types of support. Based on the state of discussions
between the Asset Management Company and the sponsor assuming the sponsor support agreement, SANKEI REAL ESTATE aims to continue to further expand its asset size and has set a mid-term asset size target of 200 billion yen to
300 billion yen (the Asset Management Company set the target internally on June 14, 2019, based on internal discussions). However, the mid-term asset size target above is solely a target, and neither the achievement of the target
nor the timing of achievement are definite or guaranteed. Furthermore, the timing of achievement of the targets may be delayed due to changes in the investment environment, real estate market conditions, etc. and other reasons.
Page 10
1. “J-REIT” refers to a listed real estate investment corporation, and “Office J-REITs” refer to J-REITs with an office buildings rate(*) exceeding 50% in the portfolio of each investment corporation at the end of the most recent fiscal period
as of September 30, 2021. Furthermore, “office J-REITs (asset size of less than 300 billion yen)” are “office J-REITs” that have an asset size (on acquisition price basis) of less than 300 billion yen at the end of the most recent fiscal
period as of September 30, 2021. Specifically, these are, in addition to SANKEI REAL ESTATE, One REIT, Inc., NIPPON REIT Investment Corporation, Invesco Office J-REIT, Inc., MIRAI Corporation, XYMAXREIT Investment Corporation,
Takara Leben Real Estate Investment Corporation, NTT UD REIT Investment Corporation, TOKYU REIT, Inc., Global One Real Estate Investment Corp., Ichigo Office REIT Investment Corporation and Japan Excellent, Inc.
*
“Office buildings rate” is the percentage (on acquisition price basis) of “office buildings” included in an investment corporation’s entire portfolio. The same applies below.
2. “Annual average rate of growth of asset size since listing” represents the annual average rate of growth of asset size of office J-REITs (asset size of less than 300 billion yen) from the time of listing until the end of the most recent fiscal
period. It is calculated through exponentiation of the (growth rate of) percentage of asset size (on an acquisition-price basis) until the end of the most recent fiscal period against the asset size (on an acquisition-price basis) at the endof the fiscal period containing the listing date by the inverse of the number obtained by subtracting 1 from the total number of fiscal periods from the end of the fiscal period containing the listing date until the end of the most recent
fiscal period divided by 2. The figure for SANKEI REAL ESTATE is calculated using the asset size after acquisition.
3. “P/NAV” is the figure obtained by dividing the investment unit price on September 30, 2021, by NAV per unit(*). The same applies below.
*“NAV per unit” is the amount calculated by subtracting the total book value of the real estate related assets from the total appraisal value of real estate related assets held, dividing this by the number of investment units
issued and outstanding, and adding this to the net assets per unit at the end of the most recent fiscal period of the J-REIT subject to calculation as of September 30, 2021. The same applies below.
4. The dotted lines in the graphs are straight lines approximating the relationships between “asset size” and “P/NAV” and between “distribution yield” and “asset size” for Office J-REITs (asset size of less than 300 billion yen) that are
statistically calculated to minimize the sum of the error (distance between the anticipated line and the coordinates of the distribution) using the least-squares method.
Page 11
1. “During normal operation” (also referred to as “the level of normal operation”) refers to the level at the time of stable operations rather than the temporary level immediately after commencement of operations by SANKEI REALESTATE. The same applies below.
Page 15
1. The actual values of NAV per unit are shown for NAV per unit for August 31, 2019 (1st FP), February 29, 2020 (2nd FP), August 31, 2020 (3rd FP), February 28, 2021 (4th FP) and August 31, 2021 (5th FP). The actual values of NAV per
unit in each period are calculated as follows.
Actual value of NAV per unit = Net assets per unit(*) at end of FP + Unrealized gain/ loss at end of FP(**) ÷ Number of investment units issued and outstanding at end of FP(***)

57SANKEI REAL ESTATE Inc.

Notes
*

“Net assets per unit” is obtained using the following equation. This is simply shown as “Net assets” in the graph. The same applies below.
Net assets per unit = Net assets at end of FP (after deducting distributions at the end of each FP) ÷ Number of investment units issued and outstanding at end of FP** “Unrealized gain/loss at end of FP” is obtained using the following equation. It is referred to as “unrealized gain” if the result is positive and “unrealized loss” if negative. This is simply shown as “Unrealized gain” or “Unrealized loss” in the graph.
Unrealized gain/loss at end of FP = Total appraisal value of assets held by SANKEI REAL ESTATE at end of FP - Total book value of assets held by SANKEI REAL ESTATE at end of FP*** “Number of investment units issued and outstanding at end of FP” is the number of investment units issued and outstanding at the end of each fiscal period.
2. Average annual growth rate is shown as the annualized value of the rate of increase from the NAV per unit of 108,184 yen for the fiscal period ended August 31, 2019 (1st FP) to the NAV per unit of 122,507 yen for the fiscal period ended August 31, 2021
(5th FP).
3. The figures shown on this page are rounded to the nearest unit and percentages are rounded to one decimal place.
Page 17■ (Left figure) Acquired assets
1. “Acquisition price” is shown as the transaction price of trust beneficiary rights shown on the transaction agreement pertaining to each of the acquired assets rounded down to the nearest million yen. The transaction prices do not include consumption taxes,
local consumption taxes or expenses required for acquisition.
2. “Appraisal value” is shown as the appraisal value shown on each real estate appraisal report as of July 1, 2021. The appraisal of acquired assets is entrusted to The Tanizawa Sōgō Appraisal Co., Ltd. and Japan Real Estate Institute.
3. “Appraisal NOI yield” is the ratio of the net operating income derived by the direct capitalization method shown on the real estate appraisal report against the acquisition price, rounded to one decimal place.
4. “Occupancy rate” indicates the percentage of the total leased area(*2) against the total leasable area(*1) of each of the acquired assets as of September 30, 2021, rounded to one decimal place.
(*1) “Total leasable area” is the total area believed to be leasable (not including area for storage facilities, billboards, parking areas, etc.) based on lease agreements or building drawings, etc. pertaining to each of the acquired assets as of September 30, 2021.
(*2) “Total leased area” is the total leased area (not including area for storage facilities, billboards, parking areas, etc.) shown in lease agreements for the building pertaining to each of the acquired assets as of the end of September 2021 (excluding, however,lease agreements for which the lease period has not commenced). For the portion covered by a pass-through master lease, this is the total of the area for which a lease agreement has actually been concluded with an end tenant for said portion, and thelease period has commenced.
5. The acquisition price and appraisal value of Shinagawa Seaside TS Tower and S-GATE AKASAKA are shown as the values equivalent to the quasi-co-ownership interest in sectional ownership of the building, etc. for each property acquired by SANKEI REALESTATE (25% and 20%, respectively(*)).
(*) 25% quasi co-ownership interest in trust beneficiary rights that have the co-ownership interest in sectional ownership of the office portion of the building and sectional ownership of the parking area portion of the building, and the right to use the grounds
for these (ownership and right to mutual use of the grounds) as the trust assets has already been acquired for Shinagawa Seaside TS Tower, and an additional acquisition of 25% quasi co-ownership interest in the trust beneficiary rights has been made.
Furthermore, 60% quasi co-ownership interest in trust beneficiary rights with the land and building as trust assets has already been acquired for S-GATE AKASAKA, and an additional acquisition of 20% quasi co-ownership interest in the trust beneficiaryrights has been made.
■ (Right figure) Change in the portfolio after the 4 properties were acquired
1. “After acquisition” is based on portfolio figures after acquisition of the acquired assets.
2. “Acquisition price per property” is the figure obtained by dividing the asset size (on acquisition price basis) by the number of properties, rounded down to the nearest hundred million yen.
3. “Average appraisal NOI yield” is the weighted average based on the acquisition price of the ratio of net operating income derived by direct capitalization method stated in the real estate appraisal report of each property against the acquisition price, withthe appraisal date of August 31, 2021, for assets before acquisition and July 1, 2021, for acquired assets, rounded to one decimal place.
4. “Average occupancy rate” indicates the percentage of total leased area against total leasable area as of August 31, 2021, for assets before acquisition and July 1, 2021, for acquired assets, rounded to one decimal place.
Page 18
1. “Typical floorplate” is a typical floor plan in mid- to high-rise buildings. The same applies below.
■ (Middle right figure) Cases of offices relocated to Higashi-Shinagawa
1. “Higashi-Shinagawa” refers to Higashi-Shinagawa, Shinagawa-ku, Tokyo.
■ (Bottom right figure) Asking rent in the Kita-Shinagawa/Higashi-Shinagawa area
1. “Asking rent in the Kita-Shinagawa/Higashi-Shinagawa area” is indicated as an index of the average asking rent(*1) in for-rent office buildings in each area in Shinagawa-ku and Ota-ku, with the average asking rent of large-scale buildings(*2) as of January 31,
2020, as 100.
(*1) “Average asking rent” refers to the average figure of asking rents obtained by Sanko Estate Co., Ltd., and includes CAM. The same applies below.
(*2) “Large-scale buildings” in this diagram shows buildings that have a maximum room area on the office floor of the typical floorplate (3rd floor or higher) of 200 tsubos or more. The same applies below.
2. The areas in Shinagawa-ku and Ota-ku are based on the categories specified by Sanko Estate Co., Ltd.
Page 19■ (Right figure) Asking rent in the Fukuoka area
1. “Asking rent in the Fukuoka area” indicates the average asking rent of for-rent office buildings located in each area in Fukuoka City.
2. The areas in Fukuoka City are based on the categories specified by Sanko Estate Co., Ltd.

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Notes
Page 20
1. “DBJ Green Building certification” is a certification system established by Development Bank of Japan Inc. in April 2011 to support properties that give proper care to the environment and society (Green Buildings). It evaluates and certifies properties
required by society and the economy based on comprehensive evaluation including the environmental performance of the properties in addition to responses to various stakeholders including consideration for disaster prevention and the community andsupports the initiatives they take. The same applies below.
2. “BCP” is an abbreviation for business continuity plan.
Page 21
1. “Portfolio matrix” is the balance and distribution of areas and yield, etc. in the overall assets acquired by SANKEI REAL ESTATE. The same applies below.
2. “Cap Rate” is the appraisal NOI yield, which is the ratio of net operating income derived by direct capitalization method stated in the real estate appraisal report of each property against the acquisition price, with the appraisal date of August 31, 2021, forassets before acquisition and July 1, 2021, for acquired assets, rounded to one decimal place.
3. “Greater Tokyo” refers to the prefectures of Tokyo, Kanagawa, Saitama and Chiba. The same applies below.
4. “Core cities” refers to cities with a population of 200,000 or more (excluding those in Greater Tokyo, Osaka City, Nagoya City and other ordinance-designated cities).
5. “Major regional cities” refer to municipalities with a population of less than 200,000 that are deemed by the Asset Management Company to have a certain level of demand for specific applications.
6. “Investment ratio by geographic area” states the percentage in terms of acquisition price, after categorizing overall assets acquired by SANKEI REAL ESTATE by geographic area.
7. “Investment ratio by asset” states the percentage in terms of acquisition price, after categorizing overall assets acquired by SANKEI REAL ESTATE into office buildings and those other than office buildings.
Page 22■ (Left figure) Results of a questionnaire survey
1. “Results of questionnaire survey” ranks “Items emphasized as conditions of buildings that are relocation destinations (nationwide)” in descending order from the results of a CBRE questionnaire survey (survey date: October 2020) of personnel mainly
involved in office strategy in companies with locations in Japan (150 valid responses).
2. “Options in the lease agreement” refers to options for early termination, additional floor space, priority negotiation rights, etc. granted under lease agreements.
■ (Right figure) Satisfaction with SANKEI REAL ESTATE’s properties compared with the results of the questionnaire survey (for office buildings)
1. “Satisfaction with SANKEI REAL ESTATE’s properties compared with the results of the questionnaire survey (for office buildings)” is a list categorized according to the criteria specified by the Asset Management Company for satisfaction with the overall assets
acquired by SANKEI REAL ESTATE as of the date of this document with regard to the top five items in the survey results for “Items emphasized as conditions of buildings that are relocation destinations (nationwide)” (transportation convenience, cost,location, building security, Building’s BCP (business continuity plan) compatibility).
2. “In the Miki Shoji Business District” refers to the district designated as a business district by Miki Shoji Co., Ltd., designating Chiyoda-ku, Chuo-ku, Minato-ku, Shinjuku-ku and Shibuya-ku in Tokyo, the Umeda area, the Minamimorimachi area, theYodobashi/Honmachi area, the Semba area, the Shinsaibashi/Namba area and the Shin-Osaka area in Osaka, the Akasaka/Daimyo area, the Tenjin area, the Yakuin/Watanabedori area, the Gion/Gofukumachi area, the Hakata Ekimae area and the Hakata
Ekihigashi/Eikiminami area in Fukuoka as business districts.
Page 23
1. “Office building (main asset) development properties” refers to those developed or scheduled to be developed by Sankei Building, special purpose companies or specified purpose companies in which Sankei Building invests through a silent partnership,preferred equity investment or other means, and affiliates of Sankei Building, and include those sold to SANKEI REAL ESTATE.
Page 24
1. The development plans shown in the sub asset development properties are those targeted or planned by Sankei Building and may be changed or cancelled in the future. SANKEI REAL ESTATE does not provide any assurances or promises that the plans will be
realized.
Page 27
1. “Cases of Other REITs” is an excerpt of REITs specializing in offices shown in the ARES J-REIT Digest that are investment corporations with more than 2/3 of their holdings in the 23 wards of Tokyo on an acquisition price basis. Accuracy is not guaranteed
because the values have been estimated by the Asset Management Company based on the latest disclosure materials.
Method of calculation of average rent (yen) of cases of other REITs = (Rental and CAM revenue upon the most recent settlement) ÷ 6 months ÷ Leasable area x Occupancy rate
■ (Top figure) Change in Occupancy Rate
1. “Occupancy rate” indicates the percentage of the total leased area against the total leasable area of each of the acquired assets as of each point in time, rounded to one decimal place. With regard to the timing of after acquisition, the occupancy rate isshown as of August 31, 2021, for assets before acquisition and as of September 2, 2021, for acquired assets.
2. In this document, “COVID-19 crisis” means the situation where the TSE REIT index fell suddenly due to the spread of COVID-19 and refers to March 2020. The same applies below.
■ (Bottom figure) Change in Portfolio’s Actual NOI Yield and Office Buildings Average Rent
1. “Actual NOI yield” refers to the actual NOI yield of all assets held at each point in time calculated using the following equation for assets after acquisition. With regard to the timing of after acquisition, actual NOI yield is shown as of August 31, 2021, forassets before acquisition and as of September 2, 2021, for acquired assets.
Actual NOI yield(*) = Actual NOI (annualized) ÷ acquisition price(*) As some fixed asset taxes on acquired assets have not been expensed in the fiscal period ended August 2019, the fiscal period ended February 2020, the fiscal period ended February 2021 and after acquisition, the level during normal operation is shown
after adjustment being made assuming these are expensed.
2. “Office Buildings Average Rent” is the average rent per tsubo of assets held at each point in time for acquired assets used as office buildings. With regard to the timing of after acquisition, average rent is shown as of August 31, 2021, for assets before
acquisition and as of September 2, 2021, for acquired assets.

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Notes
Page 28■ (Top left figure) Rent Revision Performance of Office Buildings (Based on Rental Area)
1. Of SANKEI REAL ESTATE’s assets before acquisition, applies to 10 properties classified as “office buildings” (Tokyo Sankei Building (2% co-ownership interest), BREEZÉ TOWER (45% quasi co-ownership interest in sectional ownership of
the office portion of the building, etc.), S-GATE NIHONBASHI-HONCHO (51% co-ownership interest), S-GATE AKIHABARA, Hibiya Sankei Building, Hatchobori Sankei Building, Toyo Park Building, Shinagawa Seaside TS Tower (25% quasi coownership interest in sectional ownership of the building, etc.), Omori Park Building, S-GATE AKASAKA (60% quasi co-ownership interest)). In the 10 applicable properties, those with rent revision under lease agreements occurring in the
period from March 1, 2021, until August 31, 2021 (limited to those for which a lease agreement was concluded or renewed during the relevant period) applied to 13 tenants with a total of 1,195 tsubos in area (rounded to the nearestunit). Assuming the revised area is 100%, on a leased area basis, monthly rent was increased in 35.1%, renewed at the same level (maintained) in 57.3% and reduced in 7.6%(*). The percentages are rounded to one decimal place.
(*) Changes in floor space were treated as being maintained if there was no change in the current rent per unit.
2. “Rate of increase compared with prior to rent revision” refers to the figure calculated by dividing the difference between the total monthly rent after renewal and the total monthly rent before renewal by the total monthly rent before
renewal for lease agreements renewed during the period from March 1, 2021, to August 31, 2021, with increased rent (calculated for renewal with rent revision/renewal of agreements with existing tenants; limited to lease agreements
concluded or renewed during the relevant period), rounded to one decimal place.
Page 29■ (Top left figure) Scheduled renewal with rent revision/renewal and progress (targeting office buildings)
1. Applies to lease agreements concluded in the period from March 1, 2021, until August 31, 2021, stating the area subject to renewal with rent revision/renewal in the fiscal period ending February 2022 (6th FP) and the fiscal period
ending August 2022 (7th FP). The percentage of total leased area after acquisition is shown.
2. Tallying for the fiscal period ending February 2022 (6th FP) applies to the period after the acquisition of each asset acquired by SANKEI REAL ESTATE. For this reason, during the fiscal period ending February 2022 (6th FP) (fromSeptember 1, 2021, to February 28, 2022), the tally is for the period from September 2, 2021, which is the acquisition date of each of the acquired assets, until February 28, 2022, for each of the acquired assets.
3. The leased area of the office buildings subject to “contract revision/renewal planned area” is the figure corresponding to the ownership interest acquired by SANKEI REAL ESTATE in each property.
4. “Ratio to total leased area” is the value calculated by dividing the total contract revision/renewal (planned) area for each contract revision/ renewal period by the total leased area for each period, rounded to one decimal place.
5. “Progress rate” is the value calculated by dividing the total leased area for lease contracts that have been concluded as of August 31, 2021, and whose revision/renewal has been completed by the contract revision/renewal (planned)
area for each contract revision/renewal period, rounded to one decimal place.
■ (Top right figure) Rent gap for office buildings
1. “Rent gap” refers to the figure calculated by dividing the difference between the average rent of the office building portfolio(*1) of SANKEI REAL ESTATE and market rent(*2) by market rent. SANKEI REAL ESTATE believes there is roomfor negotiation with tenants to increase rent when revising rent if this figure is negative. “10 office properties” refers to the 10 office properties listed in Note 1 for the top left figure “Rent Revision Performance of Office Buildings(Based on Rental Area)” in the previous page, and “12 office properties (after acquisition)” refers to the “10 office properties” plus Shinagawa Seaside TS Tower (additionally acquired 25% quasi co-ownership interest in sectional
ownership of the building, etc.), S-GATE AKASAKA (additionally acquired 20% quasi co-ownership interest), Miyazakidai Garden Office and Hitachi Kyusyu Building.
(*1) “Average rent of the office building portfolio” is calculated using the weighted average, based on leased area, of the total amount of monthly rent specified in lease agreements concluded as of August 31, 2021, and September 2,
2021, for the office building portfolio* (Including CAM. Furthermore, it does not take into consideration free rent and rent holidays as of the same day and is based on the rent as of August 31, 2021, and September 2, 2021, if there isan agreement to change rent in the future. Furthermore, if agreements with tenants include variable rent, calculation is made without taking into consideration variable rent. Consumption tax, etc. is not included). The figures for “12office properties (after acquisition)” are calculated based on August 31, 2021, for previously acquired properties and September 2, 2021, for acquired properties.
(*2) “Market rent” is calculated using the weighted average, based on leased area, of the total median value of assumed new contract rent (typical floorplate) (including CAM) as of September 2021 for office buildings subject to rent gap
calculation within the acquired assets of SANKEI REAL ESTATE shown in the market report prepared by CBRE.
Market rent is assessed by CBRE using its own methodology assuming the conclusion of new contracts with new tenants as of September 2021 based on information collected by CBRE, and the objectivity of the assessment, and thevalidity and accuracy of the assessment content are not guaranteed. In particular, actual new contract rent fluctuates due to factors such as whether it is a new tenant or a rent revision with an existing tenant, the timing of the rent
revision, the timing of moving in, the contract area and the region, and for this reason the rent in the CBRE-assessed rent may not be realized. Furthermore, the amount and level of actual new contract rent for office building
portfolio are not guaranteed, and there are no assurances or promises that the rent increases equivalent to the “rent gap” will be made.
Page 33■ (Top left figure) Financing Highlights
1. “Balance of interest-bearing liabilities” shows the figure as of October 1, 2021.
2. “Ratio of long-term debt” is the ratio of the balance of the long-term interest-bearing debt (not including the current portion) included in the balance of interest-bearing liabilities as of October 1, 2021.
3. “Average financing interest rate” is calculated using the weighted average, based the balance of interest-bearing debt, of the anticipated applicable interest rate of each interest-bearing liability as of October 1, 2021. Calculations are on
an interest payable basis and do not include arrangement fee and other borrowing related expenses.
4. “Ratio of fixed interest rate” refers to the ratio of the balance of interest-bearing liabilities with fixed interest included in the balance of interest-bearing liabilities as of October 1, 2021.
5. “Average remaining time to maturity” refers to the period determined by the weighted average, based on the balance of each interest-bearing liability, of the period until the repayment date or redemption date of each interest-bearing
liability on October 1, 2021.
6. “LTV” is the balance of interest-bearing liabilities divided by the amount of total assets and multiplied by 100, rounded to one decimal place.
7. LTV at the end of the 5th FP is LTV of SANKEI REAL ESTATE as of August 31, 2021 (5th FP) calculated using the following equation, rounded to one decimal place.
LTV at the end of the 5th FP = [Total amount of interest-bearing liabilities as of August 31, 2021 (5th FP) ÷ total assets on balance sheet as of August 31, 2021 (5th FP)] x 100

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Notes
8. LTV at the end of the 6th FP is LTV (projected figure) of SANKEI REAL ESTATE as of February 28, 2022 (6th FP) calculated using the following equation, rounded to one decimal place.
LTV at the end of the 6th FP = [Projected total amount of interest-bearing liabilities as of February 28, 2022 (6th FP) ÷ (total assets on the balance sheet as of the of the fiscal period ended August 31, 2021 (5th FP) (projected amount) +change in interest-bearing liabilities (defined below) + total issue amount after acquisition(**) + increase in leasehold deposits, etc. for acquired assets)] x 100*“Projected total amount of interest-bearing liabilities as of February 28, 2022 (6th FP)” uses the figure obtained by adding or deducting the change in interest-bearing debt from the end of the fiscal period ended August 31,
2021 (5th FP) until repayment of borrowings using the proceeds of third-party allotment (hereinafter referred to as “change in interest-bearing liabilities”) to or from the total amount of interest-bearing liabilities on thebalance sheet as of the end of the fiscal period ended August 31, 2021 (5th FP).
** “Total issue amount after acquisition” uses the figure obtained by adding the 614 million yen total issue amount by third-party allotment to the 12,287 million yen total issue amount by public offering.
9. The same applies to LTV at the end of the 7th FP as LTV at the end of the 6th FP.
■ (Middle left figure) Distribution map of average financing interest rates and average remaining time to maturity of office J-REITs
1. Uses the figures for the most recent fiscal period of “Office J-REITs” as of September 30, 2021.
Page 34■ Maturity ladder
1. “Maturity ladder” refers to a diagram that aggregates the amounts of each interest-bearing liability for a certain period by maturity date and lists these in order of time.
Page 49, page 50
1. Entries with multiple “acquisition dates” indicate additional acquisitions of interest.
2. “Appraisal value” is shown as the appraisal value shown on each real estate appraisal report as of August 31, 2021, for assets before acquisition and as of July 1, 2021, for acquired assets.
The same applies below.
Page 53
1. “Percentage by Walking Time to the Nearest Station” is the percentage, based on acquisition price, of assets after acquisition after classifying them by the number of minutes required to walk from the nearest station assuming that it
takes one minute to travel a road distance of 80 meters, and the average is the weighted average based on acquisition price of each property of the calculated figures, rounded to one decimal place.
2. “Percentage by Building Age” is the percentage, based on acquisition price, of assets after acquisition after classifying them by building age as of September 30, 2021, and the average is the weighted average, based on acquisition priceof each property, of the calculated figures, rounded to one decimal place.
3. “Percentage by Typical Floorplate (Office Buildings)” is the percentage, based on acquisition price, of assets after acquisition of which use is office buildings after classifying them by typical floorplate, and the average is the weighted
average, based on acquisition price of each property, of the calculated figures, rounded to one decimal place.
Page 54
1. “Percentage by Contract Form” is the percentage of assets after acquisition based on leased area, rounded to one decimal place.
2. “Percentage by Lease Period” is the percentage of assets after acquisition classified into “including hotels” and “excluding hotels,” based on leased area, rounded to one decimal place. The average is the weighted average based onleased area of each property of the calculated figures, rounded to one decimal place.
3. “Percentage by Business Type” is the percentage of assets after acquisition classified by tenant business type based on leased area, rounded to one decimal place.
4. “Percentage by Business Type (Manufacturing)” is the percentage of assets after acquisition classified by tenant business type within manufacturing based on leased area, rounded to one decimal place.
5. The leased area for properties leased through a master lessee is calculated using the areas stated in the lease agreements concluded with end tenants as the areas leased to the end tenants.
Page 55
1. “Total leased area” and “% of portfolio’s total leased area” are based on figures after considering SANKEI REAL ESTATE’s ownership interest.
2. “% of portfolio’s total leased area” refers to the total leased area expressed as a percentage of the entire portfolio’s total leased area, rounded to one decimal place.
3. “Total leased area” and “% of portfolio’s total leased area” for properties leased through a master lessee are calculated using the areas stated in the lease agreements concluded with end tenants as the areas leased to the end tenants.

61